Infosys Ar 08

Power of talent “Our core corporate assets walk out every evening. It is our duty to make sure that these assets return the next morning, mentally and physically enthusiastic and energetic.” – N. R. Narayana Murthy, Chairman and Chief Mentor

This Annual Report is printed on 100% recycled paper as certified by the UK-based National Association of Paper Merchants (NAPM). The paper complies with strict quality and environmental requirements and is awarded the following international eco-labels: the Nordic Swan from the Nordic Council of Ministers; the Blue Angel, the first worldwide environmental label awarded by the Jury Umweltzeichen; and the European Union Flower.

Infosys Annual Report 2007-08

| 1

Eugenie Rosenthal InStep intern in 2007

Mardava Rajugopal

Catch Them Young participant in 2007

Deepak Gopinath

Catch Them Young participant in 2007

Connect In 2007, an impressive 66% of 350 colleges surveyed opined that our Campus Connect program has helped make their students more employable.

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Power of talent

Development Center, Bangalore, India

By 2010, the Indian IT industry will need

significantly contributed to our cultural

“CTY was an enriching

2.3 million software engineers, says a

and intellectual diversity. In the last nine

experience. The courses were

NASSCOM study. The estimated shortfall

years, we have had over 600 interns from

conducted in an encouraging,

is 22%. This shortfall is one of the key

85 premier universities such as Harvard,

open atmosphere which helped

reasons we think it is imperative to connect

Stanford, MIT and Oxford. InStep has

us think out of the box and make

the academic world with the industry. To

become a sought-after program globally,

a lot of new friends too.”

build a quality talent pool in line with our

with over 4,000 applications received for

sustainability practices, we have to start

126 positions in fiscal 2008.

where it all begins: schools and colleges.

Campus Connect

Catch Them Young (CTY)

– Mardava Rajugopal Catch Them Young participant in 2007

“Through my internship

CTY is a two-week program that gives

at Infosys, I have come to

Started in May 2004, Campus Connect

school students across India a head start

understand and appreciate

is an industry-academia partnership

in understanding Information Technology.

first-hand the power of a

program, designed to enhance the quality

Top performers in the program get an

company to change the

of education in the Information Technology

opportunity to work with our experienced

world – to transform the

space. Today, more than 490 engineering

professionals on exciting projects. Since

ambitions of a nation and

colleges, primarily from India and select

its inception in 1997, CTY has introduced

overseas universities in Malaysia and

more than 1,000 school students to

to reconfigure the world’s

China, are part of the program. Campus

various facets of IT.

Connect has been extremely successful in keeping college faculty and students

Project Genesis

abreast with the latest trends and best

Project Genesis is aimed at addressing

practices in the IT industry. To date, 1,891 faculty members and more than 26,000 students have benefited from the program.

InStep

global economy.” – Eugenie Rosenthal InStep intern in 2007

the talent requirements of the business

“The whole Infosys experience

process outsourcing industry, by making

was refreshing. CTY enhanced

youth from Tier 2 and Tier 3 towns

my ability to observe things

employable in the IT-enabled Services

from a different perspective. It

(ITeS) industry. Genesis includes programs

InStep, our global internship program,

like Train the Trainer and Principal’s

provides a platform for students from

Conclave to align curriculum and teaching

top academic institutions across the

methodologies at colleges with industry

world to work on live technical and

requirements. Started in 2005,

business projects ranging from application

Project Genesis has now spread to 407

development to business consulting at

colleges across five states in India.

our offices worldwide. The program has

understanding of business in a

gave me a short but memorable opportunity to be an Infoscion and share the pride of being associated with this esteemed organization.” – Deepak Gopinath Catch Them Young participant in 2007

Infosys Annual Report 2007-08

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Attract On an average, we receive close to 1 million job applications in a year. Just 2.3% of the applicants get selected.

On July 9, 2007, we welcomed 1,198 trainees at our Global Education Center, Mysore, India. To date, this has been the largest trainee batch on a single day at Infosys.

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Power of talent

Development Center, Mysore, India

Consider this. More than 91,187 people from 70 nationalities across 26 countries bring their varied and unique perspectives and skills to the world of Infosys. What makes us a global talent magnet? Impressive brand recall, pioneering efforts in the IT industry, exemplary people practices, a well-defined value system, leadership, or meritocracy? Perhaps, it is

Campus hiring We have one of the largest campus hiring programs in India. In fiscal 2008 alone, we recruited students from 1,079 engineering colleges. Around 1,17,303 candidates appeared for a test across campuses, 26,235 were interviewed and 18,146 were given job offers.

“There is tremendous competition for talent in India. We need to continuously demonstrate that Infosys is the place to be, to make a career and develop one’s capabilities.” – T. V. Mohandas Pai Director and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute

a combination of all.

Brand with a conscience

Global talent

We were one of seven global companies

“In today’s competitive talent

recognized as a Brand with a Conscience

market, HR has to take the lead

by the Medinge Group of Sweden, an

in differentiating the Infosys

international think tank of brand experts,

employee value proposition.

We focus on attracting the best and the brightest from across the world, and currently have offices in 63 cities worldwide. Our Global Talent Program (GTP) is a successful initiative to assimilate talent from diverse geographies like the United States, the United Kingdom, China, Australia, Mexico, Mauritius, and Japan. We recruit talent from premier universities in these countries to work on projects. These employees are trained at the Infosys Global Education Center in Mysore, India.

People practices

in 2004. The list was based on principles of ethics and humanity rather than just financial strength. Companies were rated on the evidence of ethical programs, human implications of the brand, and the ability of the brand to take risks in line with its beliefs.

We have always been a great employer. We must become the best employer in every jurisdiction that we operate in. Unless we have the confidence that we can attract and retain the best, we will not be able to delight our customer.” – Nandita Gurjar Group Head – Human Resources Development

Our employee value proposition is to provide a ‘Learning, Emotional and Financial’ value-add to every Infoscion. We have always striven to provide the best for our employees, be it world-class campuses or an engaging work culture. Our robust people practices have continued to win national and international accolades.

Infosys Annual Report 2007-08

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Swarna Sankaran Project Manager, New Market Services

Sunil Jose Gregory

Project Manager, Communications Media and Entertainment

Enable For the second consecutive year in 2007, we won the BEST award from the American Society for Training and Development (ASTD). The award recognizes an organization’s efforts to Build talent, Enterprise-wide, Supported by the organization’s leaders while fostering a Thorough learning culture (BEST).

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Power of talent

Infosys Leadership Institute and Global Education Center, Mysore, India

At Infosys, you are never too experienced

enables them to create and share

“Every employee in Infosys is

to stop learning. From a rigorous 14-week

knowledge assets, participate in discussion

enabled to succeed by hard

foundation program for new recruits to

forums, and network through blogs and

and soft levers – the hard

round-the-year technical and managerial

wikis. We have a repository of over 30,000

levers being various ILI and

training across roles, there is something for

knowledge components, of which 5,600

E&R courses, and the soft lever

everyone. We encourage the free flow

are downloaded, on an average, every

being the experiential learning

of creative ideas, regardless of hierarchy.

workday. We have won four Global Most

We were ranked 32nd in the world and

Admired Knowledge Enterprise (MAKE)

environment. These allow me to

10th in Asia-Pacific in innovation in a 2006

awards, the most recent one in 2007. We

BusinessWeek-BCG survey, an indication

are the first Indian company to be inducted

of how intrinsic innovation is to our culture.

into the Global MAKE Hall of Fame.

Continuous learning

Innovation and research

While academic records and test scores

Software Engineering and Technology

do matter, people are hired not just for their

Labs (SETLabs), our research arm, is

to view every challenge as an

degrees, but for their potential and ability to

at the forefront of research in software

opportunity to learn and work

constantly learn and adapt to change. Our

architecture, design and performance

together, and achieve greater

Education and Research function offers

modeling. As an innovation driver at

heights of customer delight.”

178 courses round-the-year, of which 91

Infosys, SETLabs focuses on three key

are instructor-led and 87 are e-learning

aspects: targeted research to address

programs. The Infosys Leadership Institute

customers’ business problems, Centers

offers 16 instructor-led training programs

of Excellence to extend technology

and 59 e-learning programs. In fiscal

competence in specific areas, and a

2008, Infoscions spent 6,51,448 training

co-creation process through which it

person-days in learning new ideas and

partners with customers in anticipating,

concepts. An important learning incentive

creating and leveraging exciting

at Infosys is a unique certification program

new technologies. SETLabs also

that prepares employees to undertake

encourages global interns to work on

greater responsibilities. In fiscal 2008, we

live technical and business projects. An

conducted over 1,28,000 certification

Intellectual Property (IP) Cell was formed

exams in various technology and business

in 2004 to guide our employees to

domains as well as in process and

leverage the power of IP for our growth.

project management. More than 27,000

In fiscal 2008 alone, we generated over

employees were awarded technical

102 invention disclosures and filed an

certifications this fiscal year.

aggregate of 10 patents in India and the

Knowledge management Our Knowledge Management program has provided employees with a powerful interactive knowledge database that

thrive and explore opportunities that I could only dream about.” – Sunil Jose Gregory Project Manager, Communications Media and Entertainment

“I take pride in enabling my team

– Swarna Sankaran Project Manager, New Market Services

US. To date, we have filed an aggregate of 119 patent applications (pending) in both countries, and have been granted two patents by the United States Patent and Trademark Office (USPTO).

Infosys Annual Report 2007-08

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Peter Norlander

Associate Manager, Human Resources Development

Han Zhang

InStep intern in 2007

Empower Fortune magazine listed us among the Top 10 Companies for Leaders in 2007 for developing leaders in a global economy.

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Power of talent

Development Center, Pune, India

Driven by a diverse, global workforce,

The approach to women’s advancement

“Infosys provided me with an

the need for effective talent deployment

and gender diversity is proactive.

opportunity to think beyond my

and engagement is vital to us. We have

Our gender inclusivity model is an

day-to-day job, and put forward

empowered our employees by creating

individually-tailored combination of

business ideas that are debated

a gender-sensitive, equal-opportunity,

support systems, company practices, and

and decided on their merit.”

performance-driven workplace. In fact,

management policies under the umbrella

we are the first Indian IT company to set

of IWIN – Infosys Women’s Inclusivity

up a Diversity Office for promoting diversity

Network. IWIN is devoted to creating

and inclusivity.

a gender-sensitive work environment

Leadership The Infosys Leadership Institute ensures that talent is optimally harnessed to stay ahead of the innovation curve. Its dedicated campus in Mysore, India, offers courses on leadership and management. We groom high potential candidates under a three-tier mentoring process. Tier 1 includes business leaders and leaders of business enabler functions, Tier 2 has people who can take on Tier 1 responsibility in three to five years, and Tier 3 consists of Infoscions expected to reach Tier 1 category in six to ten years.

“Infosys liberated my potential

for women. The initiative has received

to empower others as a

wide acclaim and won us the first-ever

summer intern. Its diverse

NASSCOM-India Today Woman Corporate

and inclusive work culture has

Award for Excellence in Gender Inclusivity

opened up the gate to success

at the NASSCOM-IT Women Leadership

for every employee.”

Summit 2007. Infosys BPO is one of the largest employers of disabled individuals, sector. In 2007, Infosys BPO was recognized by the Indian Ministry of Social Justice and Empowerment as the best employer of disabled individuals.

Special Training Program Started in 2007, the Special Training Program (STP) enables engineering

by a member of the Board of Directors,

graduates from a disadvantaged

and Tier 2 and Tier 3 leaders are mentored

socio-economic background, to compete

by Tier 1 and Tier 2 leaders respectively.

on an equal footing in the job market.

At present, we have 51 leaders in

STP has been a great success in Andhra

Tier 1, 184 in Tier 2, and 427 in Tier 3.

Pradesh, Karnataka and Orissa, and will

Other ILI initiatives are Pravesh, a program

soon be rolled out to two more states

for first-time project managers, and the

in India. The high impact of STP can be

Global Business Finishing School.

measured by the fact that the first program,

multiple geographies, we are committed to creating a workplace in which every

– Han Zhang InStep intern in 2007

239 at present, in the Indian corporate

has a mentor. A Tier 1 leader is mentored

As a global corporation operating in

Associate Manager, Human Resources Development

and making us the Employer of Choice

Every selectee in the leadership program

Diversity and inclusivity

– Peter Norlander

conducted at IIIT-Bangalore with a trainee batch of 89, had close to 100% placements this year. At present, more than 450 graduates are undergoing the six-month training program.

employee has the opportunity to participate, contribute and develop.

Infosys Annual Report 2007-08

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Ritesh Mohan Idnani

Vice President and Head – Worldwide Sales and Marketing, Infosys BPO

Surekha Pamdamaneni Software Engineer, Banking and Capital Markets

Retain We won the 2007 Optimas Award, given by Workforce Management, in the Global Outlook category. The award acknowledges our focus on talent and our ability to attract, engage, and retain the best people in the face of ever-increasing competition.

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Power of talent

Development Center, Chennai, India

At Infosys, values make for more than just a powerful tagline. We have been a proven role model for creating wealth ethically and legally. The principles of integrity, meritocracy, transparency, fairness, leadership by example, and commitment to excellence form a strong foundation for our future.

Rewards and recognition The performance-based work culture and emphasis on meritocracy ensure that talented employees get ample opportunities to grow. Every win, big or small, is always recognized and celebrated through Spot Awards at the project

“I have had the privilege of being one of the very few individuals, not just at Infosys but also globally, with a direct and intimate understanding of all facets of the outsourcing business. I firmly believe

level, Rewards and Recognition Programs

that this all-round exposure

Values that bind

at the business unit level, and

has enabled me to draw on

Awards for Excellence at the organization

specific experiences and relate

Our strong value system fosters trust and

level. The annual, much-anticipated

them to individuals across the

Awards for Excellence recognize and

organization, allowing them to

reward those who epitomize one of

achieve their full potential.”

confidence among all our stakeholders. It also unites the organization and strikes an emotional chord with Infoscions across roles and geographies. Probably, this quote from Chairman and Chief Mentor N. R. Narayana Murthy sums it up best: “Corporations must integrate their value systems into their recruitment programs. They must mandate compliance with the value system as a key requirement from each potential employee. They must ensure that every employee owns responsibility for accountability and ethics in every transaction. Corporations must publicly recognize internal role models for ethical behavior.”

Infosys’ core values – the consistent pursuit of excellence.

Employee engagement We engage employees through a fair and rewarding work environment. We believe that a working environment which helps our employees to work, relax and also have fun, contributes to the quality of their work, enriching them intellectually, physically and emotionally. Our state-of the-art campuses have health clubs, sports facilities and well-stocked libraries, to name a few. Infoscions regularly organize cultural and

High performance work ethic

sports events to which families are often

We have a comprehensive performance

from routine and foster a sense

management culture which fosters employee development. An essential component of this philosophy is an integrated performance system. The role-based organizational structure is the foundation for this performance system while feedback, evaluation, training, and rewards play a key role. The variable pay scheme (incentive scheme) enables goal-sharing and profit-sharing with Infoscions, and has strong linkages to the

invited. These events provide a break of belonging.

– Ritesh Mohan Idnani Vice President and Head – Worldwide Sales and Marketing, Infosys BPO

“Mentoring has played a key role in my professional growth. I believe a perfect mentor is someone who has attained a position in which you can envision yourself, and guides you in that direction. The credit for my success is not mine alone. It should also go to my mentors from whom I have received a lot of support.” – Surekha Pamdamaneni Software Engineer, Banking and Capital Markets

Mentoring and succession planning We recognize the power of formal mentoring as a process to build leadership, give people the right opportunity at the right time, and groom the next generation of leaders. We believe that our values will remain the same even while our leadership changes.

performance of the company, the business unit and the individual.

Infosys Annual Report 2007-08

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13

The year at a glance

14

Letter to the shareholder

17

Awards for Excellence 2007-08

21

CEO and CFO certification

22

Directors’ report

45

Management’s discussion and analysis

64

Auditors’ report

66

Balance sheet

67

Profit and loss account

68

Cash flow statement

69

Schedules

86

Balance sheet abstract and the company’s general business profile

87

Consolidated financial statements

105

Risk management report

107

Corporate governance report

122

Shareholder information

126

Share price chart

127

Additional information

Contents

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Power of talent

128

Select historical data

130

Revenue segmentation

131

Statutory obligations

132

Human resources valuation

132

Value-added statement

133

Brand valuation

134

Economic Value-Added (EVA®) statement

134

Balance sheet including intangible assets

135

Intangible assets score sheet

137

Value Reporting™

138

Management structure

139

Infosys Foundation

140

Report on environment, health and safety

141

Financial statements (unaudited) presented in substantial compliance with GAAP requirements of various countries and International Financial Reporting Standards and reports of substantial compliance with the respective corporate governance standards

150

Extract of audited US GAAP financial statements

151

Global presence



Annual General Meeting (AGM) Notice

The year at a glance in Rs. crore, except per share data

2008

2007

Growth (%)

15,648 6,772 4,963

13,149 5,871 4,225

19.0 15.3 17.5

4,470 4,470 78.24 77.98

3,777 3,783 67.82 66.33

18.3 18.2 15.4 17.6

13.25 20.00

11.50 –

15.2 –

1,370 3,931 7,689 8,496 13,490 – 13,490 57.0 82,362

1,443 3,107 5,610 7,137 11,162 – 11,162 50.3 1,15,307

(5.1) 26.5 37.1 19.0 20.9 – 20.9 – (28.6)

16,692 7,485 5,238 4,659 4,659 81.53 81.26

13,893 6,435 4,391 3,861 3,867 69.11 67.59

20.1 16.3 19.3 20.7 20.5 18.0 20.2

Indian GAAP – Stand-alone

Financial performance Income Gross profit Operating profit (PBIDTA) Profit after tax* : Before exceptional items After exceptional items EPS (par value of Rs. 5/- each) before exceptional item* : Basic Diluted Dividend Per share Special dividend

Financial position Capital expenditure Fixed assets Cash and cash equivalents Net current assets Total assets Debt Net worth Cash and cash equivalents / total assets (%) Market capitalization Indian GAAP – Consolidated Income Gross profit Operating profit (PBIDTA) Profit after tax* : Before exceptional items After exceptional items EPS (par value of Rs. 5/- each) before exceptional item* : Basic Diluted

in US $ million, except per share data

US GAAP Revenues Gross profit Operating income Net income* Earnings per equity share: Basic Diluted

4,176 1,723 1,151 1,155 2.03 2.02

3,090 1,313 852 850 1.53 1.50

35.1 31.2 35.1 35.9 32.7 34.7

Note: 1 crore equals 10 million

*Net profit for 2008 and 2007 includes a reversal of tax provision of Rs. 121 crore ($29 million) and Rs. 125 crore ($30 million), respectively

Infosys Annual Report 2007-08

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Letter to the shareholder

S. Gopalakrishnan

Chief Executive Officer and Managing Director

S. D. Shibulal

Chief Operating Officer and Director

Dear Shareholder, We had a successful fiscal 2008 and reported over US $1 billion in

Anticipating changes in global market demands, we reorganized

annual net profits. In Indian GAAP terms, revenues for fiscal 2008

our business units in November 2007. With this restructuring, we

stood at Rs. 16,692 crore, a year-on-year growth of 20%. In

have broadened our customer base and strengthened our current

US GAAP terms, revenues for fiscal 2008 stood at $4.18 billion

portfolio through scale benefits. We are also investing in solutions

and year-on-year growth was 35%.

and services that will enable us to move up the value chain and

Acknowledging our US $1 billion mark in net profits, the

improve revenue productivity on a sustainable basis.

Board of Directors has recommended a special dividend of Rs. 20

We added 170 clients during the year, taking the total number of

per share (400% on par value of Rs. 5/- per share). The Board has

active clients to 538. Revenue growth during the year was 35% in

also recommended a final dividend of Rs. 7.25 per share (145% on

US Dollar terms. Our top 10 clients grew by 38.8% while non-top 10

par value of Rs. 5/- per share). Along with the interim dividend of

clients grew by 33.6%, demonstrating balanced growth across our

Rs. 6/- per share (120% on par value of Rs. 5/- per share)

client portfolio. Most of our existing clients reaffirmed their confidence

amounting to Rs. 343 crore, the total dividend recommended

in our services, with repeat business accounting for 97% of the

for the year is Rs. 33.25 per share (665% on par value of Rs.

revenues. During the year, we entered into a multi-year global BPO

5/- per share) amounting to Rs. 1,902 crore. This is the largest

contract with Royal Philips Electronics of the Netherlands, which

dividend payout in corporate history in India. We have also decided

expanded our global presence and added 1,400 people to our

to increase the dividend payout ratio up to 30% of net profits,

employee base. We signed a multi-year “Modular Global Sourcing”

effective fiscal 2009. Our current financial policy is to pay dividend

agreement for IT services and support with Canadian Pacific. United

up to 20% of net profits.

Utilities engaged us to modernize their legacy system using Service

The Indian Rupee appreciated by 11% during the year and impacted our revenues and net profits by approximately Rs. 2,000 crore and Rs. 1,000 crore respectively. We maintained margins despite the challenging currency environment. This

Oriented Architecture. We entered into a global relationship with Provenir, Inc., under which we have agreed to deliver professional services to Provenir and jointly offer information technology services and solutions to the financial services industry.

is testimony to the durability of our business model and our

To improve proximity to our North American clients, we opened

disciplined execution. Although the impact of global economic

our first Latin American subsidiary, Infosys Technologies S. de R.L.

uncertainties may constrain growth in the short term, we see

de C.V., in Monterrey, Mexico. We also expanded our presence in

significant growth opportunities in the medium and long term.

Europe by enhancing the capacity of our nearshore facility in Brno,

14 |

Power of talent

Czech Republic. To further our commitment to creating jobs in India

Concerted efforts over the last few years have boosted the

and drawing from the local talent pool, we set up a new campus in

availability of talent in the market. During the last fiscal year,

Thiruvananthapuram.

Campus Connect, our industry-academia initiative, was extended

Clients and industry influencers have commended the success of our business model and recognized our delivery capabilities. The Boeing Company awarded us their inaugural Boeing

to 120 colleges with the participation from 14,446 students. We have also trained 871 faculty members in various engineering and other colleges.

Performance Excellence Award (BPEA). SAP awarded us the

As part of our Global Talent Program, the first batch of graduates

SAP ACE 2007 (Award for Customer Excellence). Cummins

from UK and the third batch of graduates from US universities

Inc. selected us as a Global Preferred Vendor for Information

were trained at our Global Education Center in Mysore. InStep,

Technology while we received the Supplier Excellence Award from

our global internship program, introduced students from top

Eastman Chemical for the second consecutive year. Together

universities to the Infosys experience. Project Genesis, an initiative

with our client British Telecom, we were awarded the National

of Infosys BPO, is equipping graduate students in smaller towns

Outsourcing Association award for Innovative Outsourcing Project

and cities to be employable in the ITeS industry. Together, these

of the Year 2007.

efforts have expanded the available talent pool and we are already

Our reputation as a service provider to the financial services

seeing a qualitative change among our new employees.

industry was strengthened by two media accolades. We moved

Today, our employee strength stands at over 91,000 – a figure

up to No. 14 on FinTech 100, an international annual listing

that is set to grow in the coming year. Our competitive edge as

of the top 100 global application and service providers to the

a company draws upon the skills and confidence of these bright

financial services industry. Readers of Waters, a leading financial

people. To that effect, we have invested in a strong training

technology publication, identified us as the Best Outsourcing

engine to keep our employees abreast of the latest advances in

Provider for 2007.

technology and business. During the year, both fresh engineers

This year, we unveiled version 10 of the Finacle® Universal Banking Solution, incorporating new offerings such as Islamic banking, wealth management and mobile banking solutions. It has been built with an investment of more than $60 million over the last three years. Today, we address an enormous market that offers us the opportunity to extend our success to new geographies and industry verticals. We have introduced new offerings such as ‘Learning Services’, which focus on organizational learning needs. We are also creating offerings that will be made available to companies via the Enterprise Software as a Service (SaaS) model,

and laterals logged over 6,51,448 person-days of training and more than 27,000 employees were awarded various technical certifications. We are confident that our wealth of talented people will enable us to compete better and deliver the best to our customers, despite challenging times. Fostering depth of leadership remains a top priority in a dynamic market. Currently, over 600 Infoscions are undergoing training in leadership development and we are confident that these efforts will engender a new generation of leaders who will steer the Company into the future.

where we will create and own business applications, which may be

Powered by the talent of our people and vesting reaffirmed

hosted out of our premises or the client’s premises.

faith in the resilience of our business model, we look forward to

Over the years, we have strengthened our focus on innovation. We have filed a total of 119 patent applications (pending) in the US and India. The United States Patent and Trademark Office (USPTO) has

overcoming any challenges that may lie ahead of us. We thank our investors, employees and all our stakeholders as we enter a new phase of our journey with determination and optimism.

granted us two patents. Across the world and particularly in India, the Information Technology and Information Technology Enabled Services (IT & ITeS) industry has emerged as one of the largest employers, creating thousands of well-paying jobs and nurturing a new breed of determined entrepreneurs. The phenomenal growth and success



S. Gopalakrishnan

S. D. Shibulal

Chief Executive Officer and Managing Director

Chief Operating Officer and Director

of this sector have been catalyzed by a strong industry-government partnership. The continuity of this partnership is vital to secure the

Bangalore

future of the economy and to aid the growth of allied industries.

April 15, 2008

Infosys Annual Report 2007-08

| 15

The Board of Directors Infosys Technologies Limited

T. P. Prasad

Nominations committee

N. R. Narayana Murthy

Srinath Batni

Claude Smadja

Chairman and Chief Mentor

Director Director

Nandan M. Nilekani Co-Chairman

S. Gopalakrishnan

Chief Executive Officer and Managing Director

Infosys Technologies (Australia) Pty. Ltd.

S. D. Shibulal

K. Dinesh

Chief Operating Officer and Director

Deepak M. Satwalekar Lead Independent Director

Prof. Marti G. Subrahmanyam Independent Director

Dr. Omkar Goswami Independent Director

Rama Bijapurkar Independent Director

Chairperson

Gary Ebeyan

Chief Executive Officer and Managing Director

V. G. Dheeshjith Director

U. B. Pravin Rao Director

Infosys Consulting, Inc.

Independent Director

K. Dinesh

Director and Head – Communication Design Group, Information Systems, and Quality & Productivity

T. V. Mohandas Pai

Director and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute

Srinath Batni

Director and Head – Delivery Excellence

Infosys BPO Limited T. V. Mohandas Pai Chairperson

Amitabh Chaudhry

Chief Executive Officer and Managing Director

Jayanth R. Varma Independent Director

Sridar A. Iyengar Independent Director

S. D. Shibulal Chairperson

Stephen Pratt

Chief Executive Officer and Managing Director

Ashok Vemuri Director

Chandra Shekar Kakal Director

Nandan M. Nilekani Director

Chairperson

Claude Smadja

Risk management committee David L. Boyles Chairperson

Claude Smadja Prof. Marti G. Subrahmanyam Sridar A. Iyengar

Executive Council S. Gopalakrishnan

Raj Joshi

Ashok Vemuri

Director

Infosys Technologies S. de R. L. de C.V. Ashok Vemuri

Senior Vice President – Banking and Capital Markets

V. Balakrishnan

Chief Financial Officer

Chandra Shekar Kakal

Senior Vice President – Enterprise Solutions

Sole Manager

K. Dinesh

Board Committees

T. V. Mohandas Pai

Audit committee

S. D. Shibulal

Deepak M. Satwalekar Chairperson

Director

Rama Bijapurkar

Chief Executive Officer and Managing Director Head – Executive Council

Director

Director

B. G. Srinivas

Investor grievance committee

N. R. Narayana Murthy

Eric S. Paternoster Director

Dr. Omkar Goswami

Dr. Omkar Goswami

Sridar A. Iyengar

Prof. Jeffrey S. Lehman

Prof. Jeffrey S. Lehman

Subhash B. Dhar

Independent Director

Independent Director

Deepak M. Satwalekar

Prof. Jeffrey S. Lehman

Director Director

David L. Boyles

David L. Boyles

Srinath Batni

Claude Smadja

Independent Director

Chairperson

David L. Boyles Prof. Marti G. Subrahmanyam

Director and Head – Communication Design Group, Information Systems, and Quality & Productivity

Director and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute

Nandan M. Nilekani Co-Chairman

S. D. Shibulal

Chief Operating Officer and Director

Infosys Technologies (China) Co. Ltd.

Dr. Omkar Goswami

S. D. Shibulal

Rama Bijapurkar

Director and Head – Delivery Excellence

Sridar A. Iyengar

B. G. Srinivas

Compensation committee

Subhash B. Dhar

Chairperson

James Lin

Chief Executive Officer and Managing Director

V. G. Dheeshjith Director

T. V. Mohandas Pai

Prof. Marti G. Subrahmanyam Chairperson

Director

Deepak M. Satwalekar

N. R. Narayana Murthy

Prof. Jeffrey S. Lehman

Director

16 |

Sridar A. Iyengar

Power of talent

Srinath Batni

Senior Vice President – Manufacturing

Senior Vice President – Communications Media and Entertainment

Awards for Excellence 2007-08 “Hitch your wagon to a star.” – Ralph Waldo Emerson

At Infosys, excellence is not a matter of chance. Excellence means knowing no fear. It is the belief that talent, determination and hard work are the only worthy companions on the road to success. It signifies expanding boundaries, defying limitations and redefining conventions, time after time. The Infosys Awards for Excellence salute the power, grit and spirit of those who have made excellence a way of life.

First Prize Account Management – Large Account Team for a Leading Consumer Packaged Goods Company Anindya Trivedi Debashis Majumdar Deepak Gupta Devarajan S. Hari Natarajan Harish Srinivas Gudi Ramesh Seshan Sridevi Chatta

Account Management – Small Spirit AeroSystems Account Pavan Gupta Raghavendra K. A. Sastry V. V. S. R. S. Satya N. Iyengar Senthil Kumar P. B. Sudip Singh Sundaresan Poovalingam Sundaresh Shankaran

Brand Management Infosys FlatWorld Campaign Team Ankush Patel Balaji Sampath Balaji Yellavalli Gopal Devanahalli Kannan Amaresh Manjunatha Gurulingaiah Kukkuru Richa Govil Sanjay Eknath Nayak Sanjay Sahay Satish Bhat Stephen Bruce Lane Tri Minh Huynh Vinay Viswanath Peshwa

Business Solutions Master Data Management Solution Team for a Leading Grocery Retailer Alexandru Marius Farcasiu Dana Tourelle Jefferies Lakshmi Ravinuthala Livia Valencia Davis Michael Anthony Rice

Omer Farooque Prasad Kodibagkar Ramachandran Mahesh Iyer Sandeep B. Vasanth Rao Sreekrishna Subramanian

Code Champion Fei Wang Prunthaban Kanthakumar Sumit Garg

Customer Delight Engagement Team for a Top US-based Financial Services Organization Anurag Sadhu Arindam Sarker Binay Agarwal Hiresh Gupta Inder Deep Singh Parimal Tiwari Praveen Kumar Singh Sivakumar S.

Department Management Quality Department

Development Center Management – Large Bangalore Development Center

Development Center Management – Small Mangalore Development Center

Diversity and Inclusivity Infosys BPO – Equal Opportunities Team Kalyan Chakravarthy Lokanandan R. Poornima Prasad Somi P. Gopalan Vijay Krishnamani

Infosys Customer Satisfaction Survey – 2007 Banking and Capital Markets Retail, Consumer Product Goods and Logistics

Infosys Internal Partnership Survey – 2007 Infosys Leadership Institute

Infy Champion – Domain Mitul Devendra Shah

Infy Champion – Technology Sajeesh P. J.

Innovation for Initiatives Infosys mConnect Team Anurag Sharma Dilip Diascore Kolandairaj Karthik G. V. Pragya Gupta Puneet Gupta Venkat Kumar Sivaramamurthy

Innovation for IP Creation Real Time Inventory Management Girish A. R. Shashi Shekhar Vempati Vibin Balakrishnan

Internal Customer Delight Global Immigration Team Arun Silvester A. Pallavi Konchadi Sridhara Bhat Eshan Joshi Kiran S. N. Mithun Hande Shilpa Milind Aphale

One Infy Excellence – Account Team Account Team for a Leading US-based Airlines Engagement Adithya K. S. Anthony Robert Morris Badri Narayanan M. R. Jagadish Babu Vishwanatham John Premkumar R. Manish Verma Nageswar Cherukupalli Neeraj Mahajan Rajnish Sharma Subrat Kumar Pati

One Infy Excellence – Internal Cross Functional Team Product Quality Metrics (PQM) Team Amit Chaturvedi Dheeraj Dhawan Dheeraj Gupta

Infosys Annual Report 2007-08

| 17

Hareshkumar Mahadevrao Amre Nabarun Roy Priti Budhia Priti Jay Rao Raj Seetharaman Shubha Venkatesha Murthy Vageesh Gururaj Patwardhan

People Development Communication Service Providers Talent Management Team, Pune Prashant Kumar Sinha Ravi Agarwal Sumit Sharma Vinod Gheesalal Sonigara

Program Management Limited Brands Merchandize Planning & Allocation Program Agilandeswari Janakan Elamurugan V. S. Mohammed Rafee Tarafdar Mohan Venkatathatham Narayanan R. Sivakumar H. Sudhir Subramanya Holla Sundar Raman K. Thothathri Visvanathan Vishwanath J.

Project Execution Excellence Data Center Migration Project Team for a Leading Financial Services Provider Akash Kumar Singhal Karthik Subramaniam Kasturi P. Chattopadhyay Mukesh Lukhey Partha Sarathi Mukherjee Premraj Badi Ramanathan Swaminathan Ravindra Anegundi Ritwik Chatterjee Roshan B. Shetty New Business Process Excellence Solution Implementation Team for a US-based Insurance Company Abdul Kalam Aravind Parameswaran Kartik Murthy Nishore C. L. Padmanabhan A. Sandeep Kumar Lathi Shalini A. Nair Sourabh Chatterjee Sudheeshchandran Narayanan Swati Biswal Platform Maintenance Team for a US-based Telecom Service Provider Anuradha Balasubramaniam Balaji Sankarakrishnan Bibin Bharath Hariharan Easwaran Trichur Noormina Abuthahir Ram Kumar P. Sankaragomathi Sivaramakrishnan Subha S. Suganya Ranganathan Visvanathan Lakshmi Narayan

18 |

Power of talent

Store Budgeting and Forecasting Tool Team for a Pharmaceutical Retailer Balakrishnan C. Subramanian Deepa Shenoy H. Harpreet Kaure Merwin Linus Pinto Nithya G. Kumar Ramya B. Nayak Ranajit Bhattacharjee Roopalatha Shenoy Shivaprakash Rao Vidyasagar Shenoi

Second Prize

Sales Management

Account Management – Small

Project Beam Pursuit Team Abraham Mathews Amit Sharma Andrew Willerton Anshul Mohan Deepak Natraj Ramamurthi Gautam Rohidekar Gautam Thakkar Hari S. Bhardwaj Marinko Vukovojac Rajiv Raghunandan Saumya Hebbar Srikanth M. Ramesh Iyengar Srikanth V. J. Tanikella Vasudeva Maipady Krishna Vijai Kumar Balachandra Volker Gau

Social Consciousness Special Training Program Team Gurunath Bhaskarrao Kalamadi Nagendra R. Prasad Ramesh Babu S. Ravindra Muthya Pranesha Rao

Systems and Processes – Organization Level Integrated Project Management (IPM+) Team Anoop Kumar Ganapathi Raman Balasubramanian Geetha Das Manas Jindal Ramakrishnan M. Sivashankar J. Sravan Kumar

Account Management – Large Account Team for a Leading Aircraft Manufacturer Bhaskar Kakuturu Darshan Appayanna Jayanth M. S. Naresh Agarwal Ramakrishna B. Ramanath Kopparam Suryaprakash Venkata Seshu Gulibhi Account Team for a Large Apparel Retailer Anand Jayaraman Iyer Atul Chandra Pandey Deepak Kamath B. Dinesh Bajaj Manisha Sanjay Saboo Nadish Dutt Sharad Singh Toby Jose

Brand Management InStep Team Bela Gupta Bhavna Mehra Brianna Yvonne Dieter Nidhi Ann Alexander Preeti Pincha Sanjay Purohit

Business Solutions Infosys RFID and Pervasive Solution Team Biju Sankaran Bikartana Panigrahy Devon Charles Ferreira Ian Barkin Mayank Shridhar Michael David Allen Rajesh P. Sankaralingam Sameer Shrikant Meharunkar Susan C. Thomas

Code Champion Ranjit Kumar Ravindranathan Venkata Narasimha Raju Kakarlapudi

Customer Delight

Certifications on Demand (COD) Team Heena Deepak Mehta Neelesh Nandkumar Wadke Pallavi Rahul Tongaonkar Renuka M. K. Vadivelu S. Yogesh Kumar Bhatt

Cactus Program Team Anuj Jain Badarinath Sathyanarayan Chegu Basaveshwara Mahadevaiah Kiriti Chakravorty Ratna Madhav Burugadda Kandalie Satheesh Anapuzha Kaimal Satish Venkatraman Shailesh Kumar M. Gajera

Unit Management

Diversity and Inclusivity

Enterprise Solutions

Strategic Global Sourcing Humberto V. B. Andrade Shruti Rohan Desai Srimathi Shivashankar

Systems and Processes – Unit Level

Independent Validation Solutions

Value Champions Nitha Geeth Josoni

Infy Champion – Domain Preeti Chandrashekhar

Infy Champion – Technology Arnab Nandi

Innovation for Initiatives Infosys Radien Team Anil Kumar Garg Chetan Jagatkishore Kothari Pawan Chhabra Sandeep M. K. Shyam Kumar Doddavula Venkanna Babu Payasam

Innovation for IP Creation Domain Specific Abstract Core Guruprasad R. A. Ranju Philip A. Shashi C. B.

Internal Customer Delight PRIMA Team Akhila Ramachandran Jha Jyothi Prasad Lakshmi S. Kumar Mosesraj R. Shoba Jagannathan Supratim Mandal

One Infy Excellence – Account Team Account Team for a Leading European Telecommunications and Networking Company Abhay Harigobind Das Chauhan Abhijit Nripendranath Banerjee Amit Sharma Ankur Bhan Anurag Johri Arvind Balakrishnan Damandeep Singh Soni Devinder Singh Chahal Parthasarathy Gopalakrishnan Philips T. Varghese Prashant Deshkar V. Ravi Kumar Desigan Seshadhri Sanjeev Kumar Sushil Agarwal Vinay Ramesh Vasudeva

One Infy Excellence – Internal Cross Functional Team Enterprise Program Management Solution Team Amit Gopal Lal Agarwal Anshuman Agrawal Ashish Radharaman Mishra Ganesh Bhat Joydeep Das Kaushik Nag Larry Powers Simon Moore Viswanath Sridharan Vivek Kumar Chadha

People Development Knowledge Management Team for a Global Consumer Packaged Goods Manufacturer Arindam Maitra Krishna K. V. Sanjeev Saxena

Subramanyam Venkataraman Syed Farrukh Jalal Venkatesh Chanemougananda

Program Management Team Arrow Abhishek Goyal Ashish Srivastava Basavraj Loni Chinmay Jain Deepak Mandot Hemal Kanak Shah Rajesh Kumar Dubey Ramakrishnan Krishnamurthi Santosh Subramanian Iyer Saurabh Agrawal

Project Execution Excellence CRM Global Support Team for a Leading Multinational Chemical Company Ashok Kamath Moodbidri Babu Shanmugam Dhaval Rameshchandra Mandalia Gary DePaul Merlonghi Gnana Sri Harika Siramdasu Mukund Vasant Prayagkar Munmun Basu Rupal Ravindra Gandhre Samik Ghatak Sriram Komandoor Elayavilli Development Team for Sales Cycle Management Tool for a Leading Telecommunications Services Provider Anand Madhava Menon Bhaskara Krishna Hegde Krishna Kishore Surisetti Kunal Akhaury Pranab Chakraborty Rajesh Sridharan Santosh Kumar Rao Sunil Kumar Ojha Suresh M. Vedachalam Mahadevan Product Implementation Program Team for a Leading North America Insurance Provider Ajit Shantharam Pai Amit Mantri Arun Kumar R. Krishnakumar Kizhakke Varium Prabudoss D. Prashant Shivkumar Bhide Prashantgouda F. Beeravalli Sangameshwar Pujari Seetha Lakshmy N. Iyer Sohan Ramachandran Regulatory Register System Development Team for a Leading Automobile Company Dhruba Bagchi Manikandan Menon Parakkat Nivedeeta Vijay Deshmukh Sanjay Sharma Shashank Ajit Rangole Vaibhav Saharan

Remote Procedural Call and Money Movement Team for a Leading Financial Services Company Abhijit Banerjee Bhagavath Venkata Kodigepalli Jarin James Kattampally Jithesh Ramdas Lokesh Chawla Madhu Gopala Krishna Bangalore Mohan Ramakrishna Rekha K. P. Shilpa Madhukar Acharya Yu Xiao Single Order Processing Platform Team for a US-based Telecommunications Services Provider Ashok Kumar Natarajan Chithradevy Munisamy Manjula Ramalingam Mohammed Sadaf Choudhry Ramanujam Sethuraman Achan Ramya Ganesan Robert Williams Sundaresan Ramasubramanian Vidhya Subburaj Yoganand Thulasiraman

Sales Management APL Application Management Services Pursuit Team Krishnaswamy S. Maneesh Vinod Bakhle Mona Madan Pandiya Kumar Rajamony Srinivas Vallabhajosyula Sriram Natarajan Suchit Mohanty Umashankar Malapaka

Social Consciousness Infrastructure Development Initiative Team Aruna Chittaranjan Newton Rama N. S. Mamata Welfare Society Rambabu Sampangi Kaipa Rohit Munjal Satya Murthy Dharmavarapu

Systems and Processes – Organization Level Corporate Audits and Assessments (C-CAT) Team Aman Jit Krishan Jayanta Kumar Kar Milind Shivajirao Pednekar Sridhara N. R. Sudhindra K.S. Venkatesh K. Infosys Scaling Outstanding Performance (iSOP) Team Anshuman Tiwari Raj Kumar Bansal Ravishankar Ganesan Satyendra Kumar Siva Kumar Srinivasa Venkata Nandiwada Srikantan Moorthy

Infosys Annual Report 2007-08

| 19

Systems and Processes – Unit Level

Customer Delight

Future Proof IT Infrastructure Team Jalith Lal K. V. Jitendra Sangharajka D. Murali M. G. Rajkumar S. Ravi Shankar Rajan Vishwas Bhat

Marketing and Business Intelligence Solution Team for a Leading Global Financial Services Organization Achut Perumbala Amit Srivastava Anand Hariharan Anjani Kumar Srivastava Bal Mukund Shukla Dheeraj Sadh Kumar Rupesh Vijayalaya Chola Kosalaraman

Third Prize Account Management – Large Engagement Team for a Leading European Financial Services Company Anand Jeevaraj R. Gautam Samanta Praveen Kumar Raman Veezhinathan C. V. Satish Grampurohit Naveen Prasad H. N. Vaibhav Pandhari Shrirang Raddi A. Sitangshu Supakar

Account Management – Small Account Team for a Large Food Services Marketer and Distributor in North America Aruni Acharya Balakrishnan Mayilarangam Sundararajan George Jacob Gurpreet Singh Kalra Krishna Chaitanya Pamarty Madhu Sudhan R. Prasanna Srinivasan R. Shveta Arora

Business Solutions Infosys ACCORD Solution Team Bharat Srinivasa Rao Debaprasad Chatterjee Ganesh Moorthy Krishnendu Kunti Lakshmanan Ramanathan Mithun Das Rashmi Vishwakarma Suneetha Chittamuri Vishwanath Shenoy M. Infosys Procure-to-Pay Solution Team Avinash Ramachandra Airani Balakrishna Rao A. Jatin H. Desai Manguluri Girish Narayanan Sankaranarayanan Purshotam K. Punwani Raghupathi Pai Venkatesh B. Kamath

Code Champion Mirshad Maharoof Nimesh Madhavan Sharath A. G.

Infy Champion – Domain Mandeep Singh Kwatra

Infy Champion – Technology Abhay Nath Singh Krishna Kumar Shanmughom Pavan Kumar Kurapati Subin Kesavan Yogesh Kumar Sachwani

Innovation for Initiatives Infosys Markets in Financial Instruments Directive Solutions Team Ira Gupta Jagannath Kishanrao Kulkarni Om Prakash Kesari Satish Swaminathan Shubhashis Sengupta Sreedhar V. S. Maddipati

Innovation for IP Creation Distributed XML Join Mohit Chawla Srinivas Padmanabhuni

Internal Customer Delight Global Business Finishing School Team Ashok Kacker Nayana Chekka Smitha Murthy G. Srinath Alapakam Sujatha Muthanna Nuchimanyanda Sushanth Michael Tharappan High Risk Project Monitoring Group Amruta Kumar Mohanty Srividhya Velarcaud Srinivasan

One Infy Excellence – Account Team Account Team for a Premier Global Financial Services Firm Aniruddha Majumder Anupama Pramod Rathi Kapil Jain Minal Joshi Mritunjay Kumar Singh Pankaj Kulkarni Rajneesh Malviya Rama Murthy Prabhala Sandip Ganguly Sudarshan Mandayam

People Development ESTimation EnterprisE Model (ESTEEM) Certification Team Aman Kumar Singhal Amit Arun Javadekar Dinesh Ganesan

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Power of talent

Parthasarathy M. A. Siddharth Sawhney Vijetha B. Shenoy

Program Management Finacle Program (Release 10) Team Mohan Kumar K. L. Naresh Kumar K. Rajeswari Rathnam Ranganath Kalyanasundaram Sai Kumar Jayanty Sreenivasa Rao Makkena Usha Prabhakara Shastry Vivek Anand Jeyaraj

Sales Management The Home Depot Sales Team Baljeet Singh Chhazal Dean E. Whiteside Douglas W. Addison Prashant Ratnakar Bhat Sandeep Deepak Dadlani Sharad Elhence

Social Consciousness Pratibha Poshak Abhisek Halder Aditya Haresh Parekh Aparna Domini Buddannagari Ravi Kiran Mitesh Indravadan Bhatt Mustafa Mohammadi Rangwala Sachin Mukund Kavthekar Team Akanksha Kuheli Bhattacharya Lipi Das Prasannanjaneyulu Narne Pritam Mahapatra Rohan Roy Sakshi Sharma Sudha Sagar Ratnala Venkata Sai Sriram Vepuri Vivekanand G. Shenoy Zahid Choudhury Hossain

Systems and Processes – Organization Level Business Transformation Group, Infosys BPO Binay Kumar Behera Muralidharan Anantharaman Peloshia M. P. Ramamohan Kadayinti Ramesh Muppavarapu Uday Gangadhar Gujarathi

Systems and Processes – Unit Level Finacle Change Management Program (FCMP) Team Godavarma C. K. Gopal T. N. Prasad Subramanian C. S. Ramamurthy P.

CEO and CFO Certification We, S. Gopalakrishnan, Chief Executive Officer and Managing Director, and V. Balakrishnan, Chief Financial Officer of Infosys Technologies Limited, to the best of our knowledge and belief, certify that: 1. We have reviewed the balance sheet and profit and loss account (consolidated and stand-alone), and all the schedules and notes on accounts, as well as the cash flow statements, and the directors’ report; 2. Based on our knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the statements made; 3. Based on our knowledge and information, the financial statements, and other financial information included in this report, present in all material respects, a true and fair view of the Company’s affairs, the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report, and are in compliance with the existing accounting standards and / or applicable laws and regulations; 4. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company’s code of conduct; 5. We are responsible for establishing and maintaining disclosure controls and procedures and internal controls over financial reporting for the Company, and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the Company’s disclosure, controls and procedures; and d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 6. We have disclosed based on our most recent evaluation, wherever applicable, to the Company’s auditors and the audit committee of the Company’s Board of Directors (and persons performing the equivalent functions): a) all deficiencies in the design or operation of internal controls, which could adversely affect the Company’s ability to record, process, summarize and report financial data, and have identified for the Company’s auditors, any material weaknesses in internal controls over financial reporting including any corrective actions with regard to deficiencies; b) significant changes in internal controls during the year covered by this report; c) all significant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes to the financial statements; and d) instances of significant fraud of which we are aware, that involve the Management or other employees who have a significant role in the Company’s internal controls system. 7. In the event of any materially significant misstatements or omissions, we will return to the Company that part of any bonus or incentive or equity-based compensation, which was inflated on account of such errors, as decided by the audit committee; 8. We affirm that we have not denied any personnel, access to the audit committee of the Company (in respect of matters involving alleged misconduct) and we have provided protection to ‘whistleblowers’ from unfair termination and other unfair or prejudicial employment practices; and 9. We further declare that all Board members and senior managerial personnel have affirmed compliance with the code of conduct for the current year.



S. Gopalakrishnan

V. Balakrishnan



Chief Executive Officer and Managing Director

Chief Financial Officer



Bangalore April 15, 2008

Infosys Annual Report 2007-08

| 21

Directors’ report To the members, We are delighted to present the report on our business and operations for the year ended March 31, 2008.

1. Results of operations in Rs. crore, except per share data

Income from software services and products Software development expenses Gross profit Selling and marketing expenses General and administration expenses Operating profit before interest and depreciation Interest Depreciation Operating profit before tax and exceptional items Other income, net Provision for investments Net profit before tax and exceptional items Provision for taxation(1) Net profit after tax and before exceptional items Income on sale of investments, net of taxes Net profit after tax and exceptional items Profit & loss account balance brought forward Less: Residual dividend paid Dividend tax on the above Amount available for appropriation Dividend Interim Final Special dividend Total dividend Dividend tax Amount transferred to general reserve Balance in profit and loss account EPS(2) before exceptional items Basic Diluted EPS(2) after exceptional items Basic Diluted

2008 15,648 8,876 6,772 730 1,079 4,963 – 546 4,417 683 – 5,100 630 4,470 – 4,470 4,844 – – 9,314

2007 13,149 7,278 5,871 719 927 4,225 – 469 3,756 375 2 4,129 352 3,777 6 3,783 2,195 4 1 5,973

343 415 1,144 1,902 323 447 6,642

278 371 – 649 102 378 4,844

78.24 77.98

67.82 66.33

78.24 77.98

67.93 66.44

Note: 1 crore equals 10 million (1) Includes tax reversal of Rs. 121 crore and Rs. 125 crore for fiscal 2008 and 2007 respectively (2) Equity shares are of par value of Rs. 5/- each

2. Business Total income increased to Rs. 15,648 crore from Rs. 13,149 crore in the previous year, at a growth rate of 19%. Our software export revenues aggregated Rs. 15,429 crore, up by 19% from Rs. 12,935 crore in the previous year. Of these, 63.1% of the revenues came from North America, 26.9% from Europe, and 8.6% from the rest of the world. The revenue from Europe increased from Rs. 3,393 crore to Rs. 4,207 crore, with a growth rate of 24% which is higher than the other regions. The share of fixed-price component of the business was 33%, compared to 28% during the previous year. Blended revenue productivity, in dollar terms, increased by 5.3% during the year. The gross profit amounted to Rs. 6,772 crore (43.3% of revenue) as against Rs. 5,871 crore (44.6% of revenue) in the previous year. The onsite revenues decreased from 51.7% in the previous year to 50.9%. The onsite person-months comprised 29.8% of the total billed

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Power of talent

efforts, compared to 30.1% during the previous year. The operating profit amounted to Rs. 4,963 crore (31.7% of revenue) as against Rs. 4,225 crore (32.1% of revenue) in the previous year. Sales and marketing costs were 4.7% and 5.5% of our revenue during the year ended March 31, 2008 and 2007. General and administration expenses decreased from 7% in the previous year to 6.9%. We continue to reap the benefits of economies of scale. The net profit after tax and exceptional item was Rs. 4,470 crore (28.6% of revenue) as against Rs. 3,783 crore (28.8% of revenue) in the previous year. The net profit for the year included a tax reversal of Rs. 121 crore (previous year Rs. 125 crore). The tax provisions were reversed as it was no longer required in various overseas jurisdictions. We seek long-term partnerships with clients while addressing their various IT requirements. Our customer-centric approach has resulted in high levels of client satisfaction. We derived 97% of our revenues from repeat business (i.e. a client who also contributed to revenues during the previous fiscal year). We added 170 new clients, with a substantial number of large global corporations. The total client base at the end of the year stood at 538. Further, we have 310 million-dollar clients (275 in the previous year), 141 five-million-dollar clients (107), 89 ten-million-dollar clients (71), 18 fifty-million-dollar clients (12), and 6 hundred-million-dollar clients (3). During the year, one of our clients contributed more than $300 million of revenues. We added 45.12 lakh sq. ft. of physical infrastructure space. The total available space now stands at 164.77 lakh sq. ft. The number of marketing offices as of March 31, 2008 was 47.

3. Subsidiaries We have five subsidiaries: Infosys BPO Limited, Infosys Technologies (Australia) Pty. Limited, Infosys Technologies (China) Company Limited, Infosys Consulting, Inc. and Infosys Technologies S. de R. L. de C. V. and five step-down subsidiaries: Infosys BPO S.R.O., Pan Financial Shared Services India Private Limited, P-Financial Services Holdings B. V., Infosys BPO (Poland) Sp. Z.o.o, and Infosys BPO (Thailand) Limited.

Infosys BPO Limited (IBPO) Infosys BPO Limited (formerly Progeon Limited) was incorporated in April 2002, in India, to address opportunities in business process management. As of March 31, 2008, we hold 99.98% of the equity share capital and voting power of Infosys BPO. During the year, Infosys BPO serviced 72 clients, added 5 clients, and generated Rs. 937 crore in consolidated revenue, with a net profit of Rs. 153 crore. The employee strength as on March 31, 2008 was 16,295. Our total investment in Infosys BPO as of March 31, 2008 was Rs. 659 crore. During the year, IBPO concluded a sale and purchase agreement with Koninklijke Philips Electronics N.V. (Philips) by means of which it made a 100% investment in the share capital amounting Rs. 107 crore in P-Financial Services Holding B.V., the Netherlands entity (Holding Company). This acquisition will help IBPO in acquiring domain skill sets in the finance and administration space, as well as enhance its global presence with centers in Thailand and Poland.

Infosys Technologies (Australia) Pty. Limited In January 2004, we acquired, for cash, 100% of the equity in Expert Information Services Pty. Limited, Australia, for US $24.3 million (Rs. 66 crore). The acquired company was renamed Infosys Technologies (Australia) Pty. Limited. During the year, Infosys Technologies (Australia) Pty. Limited serviced 49 clients and generated Rs. 556 crore in revenue, with a net profit of Rs. 101 crore. The employee strength as on March 31, 2008 was 363.

Infosys Technologies (China) Company Limited

Some of the key process improvement initiatives are:

Infosys Technologies (China) Company Limited (Infosys China) is a wholly-owned subsidiary and was formed to expand our business operations in China. We have invested US $10 million (Rs. 46 crore) of capital in Infosys China and advanced a loan of US $8 million (Rs. 32 crore) as of March 31, 2008. During the year, Infosys China serviced 59 clients, and generated a revenue of Rs. 77 crore, with a net loss of Rs. 7 crore. The employee strength as on March 31, 2008 was 699.

• IPM+, an integrated project management suite, to improve project and program management

Infosys Consulting, Inc. In April 2004, we established Infosys Consulting, Inc., a wholly-owned subsidiary, in Texas, U.S., to add high-end consulting capabilities to our Global Delivery Model. The Board had approved an investment of up to US $75 million in the share capital of Infosys Consulting, Inc. We have invested US $40 million (Rs. 171 crore) as of March 31, 2008. During the year, Infosys Consulting serviced 90 clients, and generated a revenue of Rs. 246 crore, with a net loss of Rs. 51 crore. The employee strength as on March 31, 2008 was 265.

Infosys Technologies S. de R. L. de C. V. During the year, we established our first Latin American subsidiary, and opened a development center and office for the region in Monterrey, Mexico. The subsidiary, Infosys Technologies S. de R. L. de C. V., provides our complete range of business consulting and information technology services for clients in all industries including banking, financial services, retail, consumer packaged goods, resource, energy and utilities. The center provides key offerings in business process outsourcing, infrastructure management and packaged solutions implementation. The Board has approved an investment of up to Mexican Pesos 59.9 million. During the year, Infosys Mexico serviced six clients, and generated a revenue of Rs. 3 crore, with a net loss of Rs. 7 crore. The employee strength as on March 31, 2008 was 75. Our investment in the subsidiary as of March 31, 2008 was Rs. 22 crore.

4. Finacle® Finacle®, our universal banking solution, helps banks win in the flat world by enabling them to shift their strategic and operational priorities. It maximizes their opportunities for growth while minimizing the risks that come with large-scale business transformation. This modular solution addresses the core banking, treasury, wealth management, consumer and corporate e-banking, mobile banking and web-based cash management requirements of universal, retail and corporate banks worldwide. We recently released Finacle® version 10, which brings a whole new set of offerings including Islamic banking, wealth management and enhanced mobile banking solutions. Finacle® currently powers 109 banks across 60 countries, helping them serve over 20,000 branches, 160 million customers, 230 million accounts, and 1,50,000 concurrent users, supporting over 69 million peak banking transactions per day spread across multiple installations. Independent reports by renowned research firms have positioned Finacle® among the leaders in the global evaluation of retail core banking solution vendors. Finacle® has also emerged as one of the most scalable core banking solutions in the world by achieving an unparalleled performance benchmark of 104 million effective transactions per hour (29,010 ETPS).

5. Quality We continue to invest and reap benefits through quality initiatives. In August 2007, Infosys China was appraised at Level 5 of the latest CMMI model, v1.2. It is the first company in China to hold this certification. Apart from continued focus and surveillance audits in ISO certifications such as ISO 9001-TickIT, ISO 27000, AS 9100, etc., our quality department manages key process improvement initiatives. Our quality initiatives are aligned to business goals of units through the balanced scorecard approach.

• Enhanced focus on tools and reuse to improve productivity • BrITe (Business results impact @ Infosys Technologies), an innovative methodology that uniquely blends IT-specific Six Sigma approach with statistical predictive modeling and Lean principles to address diverse business critical parameters. We have a trademark for this improvement methodology. • The iSOP (Infosys Scaling Outstanding Performance) program to evaluate and identify improvements in units using the Baldrige model • Metrics-based models to evaluate quality of object-oriented design • PRIMA awards, a quarterly recognition program for execution excellence. The PRIMA framework has helped to manage and improve excellence.

6. Software Engineering and Technology Labs The Software Engineering and Technology Labs (SETLabs) at Infosys is the center for applied technology research in software engineering and enterprise technology. SETLabs leverages emerging technologies for improving engineering effectiveness and developing client-focused business solutions. During the year, SETLabs built several solutions, frameworks, tools and methodologies in the areas of software engineering, high performance and grid computing, convergence technologies, information management, Web 2.0 and knowledge engineering. During the year, more than 100 articles were published by SETLabs researchers in leading journals, magazines and conference proceedings. SETLabs Briefings published three industry-specific issues related to insurance, banking and capital markets, and energy verticals, in addition to its regular issues. A special issue on testing was also published. SETLabs conducted 24 Innovation Workshops with customers from the US and Australia, to identify research collaboration possibilities. SETLabs collaborated with leading national and international universities such as the Indian Institute of Information Technology, Hyderabad, Purdue University, University of Southern California, and Queensland University of Technology. Researchers from BT Group PLC and SETLabs will also collaborate on research and innovation. A Memorandum of Understanding (MoU) has been signed to this effect. We currently have two issued patents granted by the US Patent and Trademark Office. An aggregate of 119 patent applications are pending in the US Patent and Trademark Office and Indian Patent Office.

7. Reorganization During the year, we reorganized our business units in anticipation of changes in the global IT industry and to differentiate vis-à-vis our competitors. The reorganization, effective November 2007, will help us to enhance the “One Infy” experience and will, in turn, deepen our transformational capabilities. The restructuring will also help us to broaden our customer base and strengthen our current portfolio through scale benefits. The new opportunities will leverage the strengths of our next-generation of leaders.

Highlights • Six vertical Industry Business Units (IBUs) and five Horizontal Business Units (HBUs) that cut across all verticals • The European business divided into industry verticals, and integrated within the IBUs • The New Growth Engines (NGE) unit formed to expand business in Australia, China, Japan, Middle East, Canada, South America and Latin America • India Business Unit formed to focus on India and tap the growing domestic market

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• Increased focus on delivery excellence

9. Awards

• Consolidated consulting skills

These are some of the awards that we received during the financial year 2007-08:

• Consolidated sales and marketing functions

Executive Council As part of the re-organization, an Executive Council (EC), chaired by the CEO, consisting of the COO, CFO, executive board members and select unit heads, was constituted, to leverage the strengths of our next generation of leaders. The responsibilities of the EC members include participation in the formulation of business strategy with the Board, framing policy for strategy deployment, ensuring management and operational supervision, and enabling risk mitigation strategies.

8. Branding During the year, we received the Diamond Award for the best global brand campaign in the category of Sharpening Brand and Competitive Differentiation from the IT Services Marketing Association (ITSMA). We got extensive coverage in leading global print, electronic and digital media. Time magazine commented on our professionalism with the headline “Meritocracy is the model.” Newsweek referred to us as a “Titan of globalization.” BusinessWeek, The Independent, The Guardian, Financial Times, BBC World, CNBC and CNN covered Infosys during the year. We were also featured on leading online business and technology destinations like www.cio.com, www.businessweek.com and www.forbes.com. CNBC promoted the Infosys brand on its channels across the US, Europe and Asia as a sponsor of the “Who’s in charge?” debate and as the host of the 2020: Future By Design breakfast at Davos. Our employees continued to demonstrate thought leadership and domain expertise with papers in leading industry publications like Bank Accounting & Finance (“The Subprime Mortgage Market: Current State and the Road Ahead”), Wall Street & Technology (“Corporate Actions Outsourcing Utilizing a SaaS Model”) and Manufacturing Business Technology (“Win in the flat world: Apply Lean principles across the IT organization”). We were recognized as a leader by leading analyst firms for many of our offerings. A leading analyst firm ranked us as a leader in global IT infrastructure outsourcing, SAP implementation providers and Oracle implementation providers. We also figured as a leader for North America and Europe Offshore Application Services. Infosys BPO was ranked amongst the top six comprehensive FAO service providers by a leading analyst firm. We were the key sponsor of many flagship events including Sapphire and Oracle Open World. Our executives were invited speakers at leading C-level conclaves like India Economic Summit, Fortune CEO Summit and World Economic Forum. We have leveraged Web 2.0 technologies for effective online branding. Our blogs ran on www.economist.com, our videos run on YouTube and the investor section of our website was voted as the winner in the ‘Best Investor Relations Website’ and ‘Best Corporate Governance’ categories in Asia Pacific and Africa by MZ Consult NY LLC, in the 2008 investor relations global rankings. We also launched our own intranet-based TV channel, Infy TV, for internal communication and branding. Infosys Foundation is sponsoring the ACM (Association for Computing Machinery) Award through an endowment. The ACM-Infosys Foundation Award in the Computing Sciences recognizes personal contributions by young scientists and system developers to a contemporary innovation that, through its depth, fundamental impact and broad implications, exemplifies the greatest achievements in the discipline. The award carries a cash prize of US $1,50,000. We also instituted a Rs. 1 million Infosys Mathematics Award jointly with the National Institute of Advanced Studies in order to encourage research in mathematics and sciences.

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• Award for best investor relations by an APAC company in the US market at IR Magazine US Awards 2008 • ICAI judged the Infosys Annual Report 2007 as the best in the Information Technology, Communication and Entertainment Enterprises category • The International Association of Outsourcing Professionals (IAOP) named Infosys in its 2008 Global Outsourcing 100 • Best Investor Relations Website and Company with Best Corporate Governance Practices in Investor Relations (IR) Global Rankings 2008 in APAC categories • Voted the New Age Employer of Choice in 2007 in a poll conducted by CNBC-TV18, CNBC Awaaz and Moneycontrol.com • We moved up to No. 14 on FinTech 100, an international annual listing of the top 100 global application and service providers to the financial services industry • Named Best Outsourcing Partner in Waters Readers’ Survey • Named a leader in Global IT Infrastructure Outsourcing • NASSCOM-India Today Woman Corporate Award for excellence in gender inclusivity • Global MAKE award for the fourth year • Fortune’s Top 10 Companies for Leaders • Bloom Group named Infosys.com as a prospect-friendly website • The Reputation Institute named Infosys, a globally respected company • Dun & Bradstreet’s Top Indian IT Companies 2007 • LACP Silver Award for Infosys Annual Report • 2007 Optimas Award in the Global Outlook category Our customers and market influencers also commended our service excellence and delivery efficiency during the year: • The 2007 Boeing Performance Excellence Award (BPEA) from The Boeing Company for a 12-month gold-level performance • Named Royal Bank of Scotland Group’s 2007 Best Technology Supplier • Two Partner in Progress awards from Sears Holdings Corporation • DaimlerChrysler’s IPS Supplier of the Year 2006 • Named Sainsbury’s 2006 IT Supplier of the Year

10. Development centers During the year, we incurred capital expenditure aggregating Rs. 1,181 crore on physical infrastructure, (Rs. 1,194 crore during the previous year), and another Rs. 189 crore on technological infrastructure, (Rs. 249 crore in the previous year). In all, Rs. 1,370 crore has been invested, as against (Rs. 1,443 crore in the previous year). As of March 31, 2008, in India, we had 164.77 lakh sq. ft. of space with 77,754 seats, and an additional 83.63 lakh sq. ft. under construction that would provide 26,881 seats.

11. Liquidity We continue to be debt-free, and maintain sufficient cash to meet our strategic objectives. Liquidity in the balance sheet needs to balance between earning adequate returns and the need to cover financial and business risks. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2008, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments, leaving a surplus of Rs. 2,079 crore. As on March 31, 2008, we had liquid assets of Rs. 7,689 crore as against

Rs. 5,610 crore at the previous year-end. These funds have been invested in deposits with banks and highly-rated financial institutions.

12. Increase in share capital During the year, we issued 7,85,896 shares on the exercise of stock options under the 1998 and 1999 employee stock option plans. Due to this, the outstanding issued, subscribed and paid-up equity share capital increased from 57,12,09,862 shares to 57,19,95,758 shares as of March 31, 2008.

13. Appropriations Dividend In October 2007, we paid an interim dividend of Rs. 6/- per share (120% on par value of Rs. 5/-). We recommend a final dividend of Rs. 7.25 per share (145% on par value of Rs. 5/- per share) and a special dividend of Rs. 20/- per share (400% on par value of Rs. 5/- each). We recommended the special dividend on crossing a significant milestone of reaching US $1 billion in net profits. The total dividend amount is Rs. 1,902 crore, as against Rs. 649 crore for the previous year. Dividend (including dividend tax) as a percentage of profit after tax is 49.8% (19.8% excluding the special dividend) as compared to 19.9% in the previous year. The register of members and share transfer books will remain closed from May 31, 2008 to June 14, 2008, both days inclusive. Our Annual General Meeting has been scheduled for June 14, 2008.

Transfer to reserves We propose to transfer Rs. 447 crore to the general reserve. An amount of Rs. 6,642 crore is proposed to be retained in the profit and loss account.

14. Dividend policy Our current financial policy is to pay dividends up to 20% of net profits. The Board reviewed the policy, and considering the need to balance the cash required in the business with that of enhancing returns to shareholders, decided to increase the dividend payout ratio up to 30% of net profits effective fiscal 2009.

15. Corporate governance We continue to be a pioneer in benchmarking our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and abroad. We have undergone the corporate governance audit by ICRA and CRISIL. ICRA has rated our corporate governance practices at CGR 1. CRISIL has assigned CRISIL GVC Level 1 rating to us. We have complied with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). For fiscal year 2008, the compliance report is provided in the Corporate governance report section of this Annual Report. The auditors’ certificate on compliance with the mandatory recommendations of the committee is annexed to this report. We have documented our internal policies on corporate governance. In line with the committee’s recommendations, the Management’s discussion and analysis of the financial position of the Company is provided in this Annual Report and is incorporated here by reference. We continue our practice of providing a report on our compliance with the corporate governance requirements of six countries, in their national languages, for the benefit of our shareholders in those countries. During the year, we continued to fully comply with the US Sarbanes-Oxley Act of 2002. Several aspects of the Act such as the Disclosure Committee Requirements, Whistleblower Policy, and Code of Conduct for Senior Officers and Executives have already been instituted.

16. Additional information to shareholders We continue to provide additional information in the form of intangible assets score sheet, human resources accounting and value-added statement.

We used to report the “Current cost adjusted financial statements” as an additional information to the shareholder, using the methodology prescribed by the Guidance Note on Accounting for Changing Prices issued by the Institute of Chartered Accountants of India which is similar to IAS 29 issued by the International Accounting Standards Committee (IAS). Recently, the International Practices Task Force (IPTF) appointed by the AICPA’s Center for Audit Quality had identified certain hyper-inflationary economies for which this standard is applicable. IPTF’s criteria for identifying hyper-inflationary economies is similar to that of IAS 29, Financial Reporting in Hyper-inflationary Economies. Since, this standard is applicable only to identified hyper-inflationery economies, we do not consider it relevant to continue publishing this report and the same has been discontinued starting this fiscal year. During the year, NASDAQ modified its rules relating to dispatch of annual reports to ADR holders. Under the amended rules, a company can host the annual report on its website, in lieu of physical distribution. We have decided to adopt this rule and accordingly have made the annual report and the filing with the US Securities and Exchange Commission (SEC) in Form 20-F available on our website www.infosys.com. However, a physical copy will be made available to shareholders on request. Consequent to this, we are not circulating the Form 20-F filing with SEC to our shareholders in India, but the same would be made available to shareholders on request. However, the extract of the audited balance sheet and income statement as per US GAAP is provided in the Annual Report. The International Financial Reporting Standards (IFRS) are gaining the attention of companies, regulators and investing communities across the globe. Many countries have adopted IFRS and some of them, including India, are in the process of adopting the same. Recently, SEC permitted Foreign Private Issuers to file financial statements in accordance with IFRS without any reconciliation with US GAAP. SEC is in the process of announcing a framework and rules for adoption of IFRS by domestic companies in the US. Currently, we report our financials under both Indian and US GAAP. We also report in substantial compliance with the GAAP of six countries namely – Australia, Japan, UK, France, Germany and Canada. We have evaluated the requirements of IFRS and believe that we are fully prepared to adopt IFRS. However, we will await the issuance of final framework and rules for adoption of IFRS by domestic companies by SEC before we adopt the same. In the interim, we have provided the balance sheet and income statement in substantial compliance with IFRS in the Annual Report.

17. Particulars under Section 212 of the Companies Act As per Section 212 of the Companies Act, 1956, we are required to attach the directors’ report, balance sheet, and profit and loss account of our subsidiaries. We had applied to the Government of India for an exemption from such an attachment as we present the audited consolidated financial statements in the Annual Report. We believe that the consolidated accounts present a full and fair picture of the state of affairs and the financial condition, and are accepted globally. The Government of India has granted us exemption from complying with Section 212. Accordingly, the Annual Report does not contain the financial statements of these subsidiaries. We will make available the audited annual accounts and related information of subsidiaries, where applicable, upon request by any of our investors. These documents will also be available for inspection during business hours at our registered office in Bangalore, India.

18. Particulars of employees As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the annexure to this report. The Department of Company

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Affairs has amended the Companies (Particulars of Employees) Rules, 1975 to the effect that particulars of employees of companies engaged in the information technology sector posted and working outside India, not being directors or their relatives, drawing more than Rs. 24 lakh per financial year or Rs. 2 lakh per month, as the case may be, need not be included in the statement. Accordingly, the statement included in this report does not contain the particulars of employees who are posted and working outside India.

term include reducing the consumption of water, power and paper by 25% and carbon emissions by 10%. We plan to become carbon neutral in the next two years by managing and reducing carbon emissions, reducing carbon intensity by purchasing green energy, and creating carbon sinks.

As per Article 122 of the Articles of Association, Claude Smadja, Sridar A. Iyengar, Nandan M. Nilekani, K. Dinesh and Srinath Batni retire by rotation in the forthcoming Annual General Meeting. All of them, being eligible, offer themselves for re-appointment.

• Our Health Assessment and Lifestyle Enrichment (HALE) initiative, focuses on enhancing the emotional value-add of our employees, by optimizing their health, quality of life and work environment. We have created world-class gymnasiums, swimming pools, aerobics centers, tennis courts, etc. This year, HALE conducted 52 events related to health and wellness in which 13,200 employees participated. All employees are covered by health insurance, while contractual employees benefit from subsidized annual medical check-ups.

20. Responsibility statement of the Board

Enabling employees

The directors’ responsibility statement, setting out the compliance with the accounting and financial reporting requirements specified under Section 217 (2AA) of the Companies Act, 1956, in respect of the financial statements, is annexed to this report.

• Diversity and inclusion: As a global organization, diversity enables us to build confidence and trust in the minds of customers and employees. Our employees belong to 70 nationalities. We have recruited 239 disabled employees. To attract the most competitive talent, we offer an inclusive work environment. Our principle is to de-emphasize the differences and celebrate commonality. We have set up a Diversity Office guided by a Diversity Council comprising members from across the Infosys Group. We have created support systems and programs for employees, especially working mothers, the disabled and employees of different nationalities. We have also introduced diversity dashboards, an inclusivity index and a 360 degree feedback mechanism for managers to ensure that all employees are aware of their accountability to diversity and inclusion.

19. Directors

21. Auditors The auditors, M/s. BSR & Co. Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

22. Fixed deposits We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the balance sheet date.

23. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are set out in the annexure to this report.

24. Human resource management Employees are vital to the Company. We have created a favorable work environment that encourages innovation and meritocracy. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high caliber employees. We added 13,659 (net) and 22,671 (gross) employees, taking the total strength to 73,490 (net) up from 59,831 at the end of the previous year. Our attrition rate stands at 13.4% compared to 13.7% for the previous year. Attrition, excluding involuntary separations, stood at 12.1% compared to 12.2% in the previous year. Over the last year, 8,85,035 people applied to us for employment and we continue to remain an employer of choice in our industry.

25. Sustainability initiatives Sustainability to us means measuring success by how much wealth we create responsibly for our customers, employees, the society in which we operate and all our other stakeholders. This commitment is embedded in the setting up of a Sustainability Executive Council to promote our efforts and help the business units view operations in that context. We believe in creating sustainable frameworks with academia, NGOs, non-profit organizations, and civil and trade bodies to reach out to communities as well as help create policies with the government.

Enabling work environment A good workplace, as we define it, balances our commitment to the health and safety of employees while reducing the environmental impact. • Our commitment to Health, Safety and Environment (HSE) is deployed through Project Ozone, a comprehensive HSE management system initiated in 2003. Our goals in the medium

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• Employee education: We are committed to equipping employees with skills that will help their career and personal growth. • Our Education and Research (E&R) department offers technical and project management training to employees. Through the foundation program, all entry-level employees are trained at the Global Education Center in Mysore. It amounted to 6,13,738 training person days. On the role-based training front, employees opted for both classroom as well as e-learning courses on technical and project management skills, leading to 37,710 training person days. About 27,604 employees completed their technical competency certification program this year. We piloted the internship program for India-based, final-year Computer Science students this year. So far, 243 interns from 33 premier colleges have joined the program. During the year, E&R won the ASTD (American Society for Training and Development) BEST award. • Infosys Leadership Institute (ILI): ILI caters to employees’ needs in the areas of behavioral and leadership skills and supports personal development through systematic processes. ILI’s efforts resulted in 1,80,019 training person-days this year. • Project Management Center of Excellence (PMCoE): PMCoE focuses on enhancing the project management competencies of our employees through multiple interventions. To date, PMCoE has trained over 2,800 managers in professional project management framework. We have over 1,800 managers / senior managers certified as Project Management Professionals from PMI, USA. PMCoE will help the business through continuous improvements on consultancy capability, mentoring structures, training modules and best practices. • ES Academy: The Academy trained 1,400 MBA graduates (functional consultants) in domain, technology, project management and quality processes, and leadership. During the year, 4,000 software engineers were trained in domain and business processes. It also provides technical and domain certifications that are benchmarked with worldclass academic certifications. Since 2005, the Academy has

certified 16,000 employees. It continues to collaborate with external educational units like Oracle University and Seibel University, in order to leverage their knowledge-base for our functional and technical consultants. Besides the internal education programs, we fund higher education programs for employees who wish to pursue degrees such as MBA, MCA, MS, CFA, etc. Since 2005, we have sponsored the education of about 280 employees. • Knowledge Management (KM): The KM initiative was formally launched at Infosys China during the year. We maintain our successful run with new methodologies for knowledge sharing and adoption. Knowledge blogs and customized wiki solutions are rolled out to employee communities to help them foster collaborative networks for speedier and smart project execution. Our central knowledge repository saw significant growth in volumes and quality this year with more than 30,000 knowledge assets, complemented by half as many documents distilled from projects and process-mandated artifacts. In addition, other KM systems host around 90,000 knowledge interactions and are archived.

Empowering society Since inception in 1981, we have created multiple frameworks for corporate governance, education, infrastructure and inclusive growth. We believe that corporations must reach out to the society and help by improving the quality of education and healthcare through various community development programs. Our Corporate Social Responsibility (CSR) activities are carried out at four different levels: • Global initiatives to develop human capital by creating sustainable frameworks with educational institutes for training students and faculty • The Infosys Foundation has a dedicated team to reach out to the underprivileged and enrich their lives • At the Board level, members lead by example by participating in the advisory councils of NGOs and civil bodies, and donating their time, money and effort to various causes • At the employee level, location-wise CSR teams address local requirements Our five key CSR themes are education, healthcare, art and culture, rural upliftment and inclusive growth. We identify partners and beneficiaries based on their goals, credibility, performance and alignment to our vision and values. The initiatives in education, inclusive growth and pro bono engagements are detailed here, while initiatives on healthcare, art and culture, and rural upliftment are detailed in our report on Infosys Foundation. Education • Primary level initiatives • We are a key sponsor of the Akshaya Patra foundation which provides unlimited free meals for economically-disadvantaged school students. We assist 80,000 children across India through this meal scheme. • We have set up more than 15,000 libraries and are also actively involved in constructing classrooms, renovating old school buildings, donating school equipment, conducting career counseling and providing scholarships to students • Secondary level initiatives • Catch Them Young (CTY), our initiative to motivate school students to dream big and aim high, has benefitted around 6,390 students since 2005 • Computers@Classrooms initiative donated 1,803 computers to schools and NGOs to promote computer awareness • Tertiary level initiatives:

• Campus Connect, our high impact and largest academic initiative, was started in 2004. It focuses on preparing industryready IT professionals by aligning skills of engineering students with industry needs. There are 490 colleges currently partnering with us and together we have enabled 25,521 students (with 15,000 in the pipeline) during the year. • Project Genesis is aimed at aligning the teaching methodology and course-curriculum at graduate schools to the BPO industry’s needs, especially in smaller towns, to improve the students’ employability. About 798 teachers and 22,619 students from 389 colleges were benefitted this year. The number of students who benefited from this program increased by almost 200%. • InStep, our global internship program, attracts students from the best academic institutions around the world to work on live and organizationally relevant projects. The 80+ colleges include Stanford, Oxford, Cornell, Purdue, Harvard and others from Spain, Italy, Denmark, Norway, Chile, Colombia and Israel. We receive, on an average, 12,000 applications and select 100+ students every year. • Infosys Fellowship Program, instituted at 12 premier academic institutions in India, supports research leading to a Ph.D • Through Industry Academia Partnership (IAP), Infosys BPO works on aligning course curriculum with industry requirements. As part of the program, we provide summer internships for final-year students and offer employment based on performance. Since its inception in 2007, IAP has covered 17 colleges, enabling 714 students. A knowledge center in Rajasthan is currently being set up. • Academic Entente (AcE) is a strategic initiative in which our employees collaborate with faculty from leading universities like Harvard, Stanford and Tuck School of Business, to publish case studies on innovation and consulting. Our employees participate in industry-academia conferences and guest lectures at prestigious forums, such as the Balanced Scorecard Hall of Fame. Student groups and faculty members also visit our campuses. • Every year, we train students from countries at the nascent stage of developing knowledge workers such as Thailand, Panama, China, Malaysia and Mauritius. While the travel costs are borne by the respective governments, we fund their training and accommodation. We have trained 560 students since 2005. In Australia, we promote tertiary education by providing student scholarships. Inclusive growth • We have recruited 239 disabled people for our Infosys BPO operations, making us the biggest employer of the disabled in the Indian IT industry. Through the disability initiative, we help the selected employees gain relevant competencies for the ITeS industry and enable our managers to create an inclusive work environment. Our goal is to increase the number of disabled employees to at least 2% of our workforce in ITeS. • Infosys Women’s Inclusivity Network (IWIN), our gender inclusive program, was initiated in 2003. IWIN works with bodies like NASSCOM to create frameworks and research on gender inclusion. Women employees constitute 31% of our workforce today. This year, to mark International Women’s Day, we launched SPARK, a unique two-day event for women students in their fourth-sixth semester from engineering colleges across India. The event witnessed the participation of 420 colleges. • Special Training Program (STP), aims at enabling students from rural areas to join the IT / ITeS industry, and has so far benefitted 479 students.

• We have collaborated with 1,309 colleges in India and abroad, and trained 4,200 teachers and 87,424 students since 2005. Infosys Annual Report 2007-08

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In addition, 60% of our development centers in India are located in Tier 2 and 3 cities. This infrastructure policy has created employment for 30,632 employees and the planned expansion will facilitate an additional 21,000 employees in these locations. It has further facilitated business / employment for the local community. We continue to take up pro bono engagements with both Indian and global bodies. We are partnering with Expand, a non-profit international development organization, to develop an information and communication technology (ICT)-enabled application that would minimize inventory requirements, reduce waste, and allow retailers and farmers to be better integrated.

Infosys Young Indians (INFYi), the first corporate chapter of Confederation of Indian Industry (CII), aims to provide a platform for social entrepreneurs by undertaking activities in economy, education, environment, healthcare and youth affairs. Currently, more than 50 young Infoscions are working on a set of social entrepreneurship ideas. We constantly monitor the progress of initiatives. On the education front, we conduct periodic reviews with academia partners. The success is measured by the annual increase in the number of students and teachers who volunteer to get trained. For example, the Special Training program conducted at IIIT-B for socially and economically underprivileged, resulted in close to 100% placements this year. Further details on our sustainability initiatives will be available in the sustainability report to be published on our website www.infosys.com in the near future.

26. Employee Stock Option Plan (ESOP)

We had introduced various stock option plans for our employees. The details of options granted under the 1998 Stock Option Plan (the 1998 Plan) and the 1999 Stock Option Plan (the 1999 Plan) are given in the table. Total grants authorized by the plan (No.) Pricing formula on date of grant Variation in terms Ratio of ADS to equity shares Options granted during the year (No.) Weighted average price per option granted (Rs.) Options vested as of March 31, 2008 (No.) Options exercised during the year (No.) Money raised on exercise of options (Rs. crore) Options forfeited and lapsed during the year (No.) Total number of options in force at the end of the year (No.) Grant to senior management Employees receiving 5%+ of the total number of options granted during the year Employees granted options equal to or exceeding 1% of the issued capital Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 The Securities and Exchange Board of India (SEBI) has issued the (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. This is effective for all stock option schemes established after June 19, 1999. In accordance with these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option, including up-front payments, if any, is to be recognized and amortized on a straight line basis over the vesting period. Our 1994 option plan came to an end in fiscal 2000. We have the 1998 stock option plan and 1999 stock option plan, where the options are issued to the employees at an exercise price not less than the fair market value. If the compensation cost on account of stock options granted after June 30, 2003 (as required by the amendment effective June 30, 2003) under 1998 and 1999 plans was 2008 No. of options 1998 Plan Outstanding at the beginning of the year Forfeited Exercised Outstanding at the end of the year Vested at the end of the year 1999 Plan Outstanding at the beginning of the year Granted Forfeited Exercised Outstanding at the end of the year Vested at the end of the year

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1998 Plan 1,17,60,000 ADS Not less than 90% of fair market value NA 1 ADS = 1 equity share – NA 15,30,447 5,00,465 40 53,212 15,30,447 – – – Rs. 77.98

1999 Plan 5,28,00,000 shares Fair market value NA NA – NA 10,89,041 2,85,431 18 1,17,716 14,94,693 – – – Rs. 77.98

computed using the fair value method, our compensation cost would have been higher by Rs. 13 crore and Rs. 1 crore and our profit would hence be less by Rs. 13 crore and Rs. 1 crore for fiscal 2008 and 2007 respectively. The impact on EPS for fiscal 2008 and 2007 would be Rs. 0.23 and Rs. 0.02 respectively. During fiscal 2008 and 2007, stock options under the 1998 Plan have not been granted, hence the weighted average fair values of grant during these years are nil. During fiscal 2008, stock options under the 1999 Plan have not been granted and hence the weighted average fair values of grant during fiscal 2008 is nil. During fiscal 2007, we granted 6,38,761 options under the 1999 Plan with a weighted average fair value of Rs. 582 per option.

Weighted average exercise price

2007 No. of options

Weighted average exercise price

20,84,124 (53,212) (5,00,465) 15,30,447 15,30,447

900 2,050 775 813 813

45,46,480 (1,71,143) (22,91,213) 20,84,124 20,84,124

908 1,845 860 900 900

18,97,840 – (1,17,716) (2,85,431) 14,94,693 10,89,041

1,121 – 1,167 634 1,163 593

1,91,79,074 6,38,761 (1,11,306) (1,78,08,689) 18,97,840 12,59,079

575 2,121 552 572 1,121 613

Acknowledgments We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We thank the Governments of various countries where we have operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Customs and Excise Departments, the Income Tax Department, the Software Technology Parks – Bangalore, Chennai, Chandigarh, Hyderabad, Jaipur, Mysore, Pune, Bhubaneswar, Mangalore, Thiruvananthapuram and New Delhi – the Ministry of Commerce, the Ministry of Finance, the Reserve Bank of India, the state governments, and other government agencies for their support, and look forward to their continued support in the future. for and on behalf of the Board of Directors

Intellectual Property (IP) created has led to enhanced quality, productivity and customer satisfaction.

R&D initiative at institutes of national importance The Maintenance Center of Excellence of SETLabs collaborated with the Indian Statistical Institute to work out alternate pricing models. An application for a patent has been filed based on this work. We are also working with the Indian Institute of Information Technology, Hyderabad on unstructured data analytics, inference and diagnostics, and development of next-generation business intelligence tools. We collaborated with the Indian School of Business, Hyderabad on managing and driving innovation in services organizations. This project led to a better understanding of areas where we can operationalize innovation in our customer engagements. The e-commerce research group is working with the Indian Institute of Science, Bangalore on the application of game theory and mechanism design to web service composition and procurement. A novel method of combinatorial auction has been designed taking care of service level agreements and quality of service.

Specific areas for R&D S. Gopalakrishnan

S. D. Shibulal

Chief Executive Officer and Managing Director

Chief Operating Officer and Director

Bangalore April 15, 2008

Annexure to the directors’ report a) Particulars pursuant to Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 Conservation of energy We have a focused strategy to optimize energy consumption. We purchase PCs and laptops that meet environmental standards, replace old hardware with more energy-efficient hardware, and are decreasing the amount of equipment to further reduce our energy consumption. We are also considering a global, socially and environmentally responsible disposal process for our equipment. Our technology refresh cycles are planned to be directly associated with performance and energy efficiency of the systems. We are consolidating systems to reduce the hardware footprint and thereby reduce energy consumption in terms of cooling and power. We have recently consolidated about 185 individual file servers across the world into 33 Network Attached Storage (NAS) infrastructure, with higher capacities. This also means that we will not be adding file servers into environments and just add disks into these NAS infrastructure for provisioning storage. In the long term, this is a sustainable mode of conserving power and cooling, apart from other costs and efforts. Our upcoming buildings will be Gold rated from LEED, the certification for energy efficiency of buildings. We are working with subject matter experts to employ latest and efficient technologies in every aspect of energy consumption areas such as lighting, air conditioning, etc. Through our integrated approach to implementing infrastructure, we hope to reduce energy consumption by 50% over the next few years. We are improvising on our air conditioning and cooling systems by adopting cutting-edge technology. Similarly, we are working on lighting systems to make optimum use of daylight and attain maximum efficiency through artificial light. We plan to procure green power to reduce emissions.

Research and Development (R&D) Research and development of new services, designs, frameworks, processes and methodologies continue to be important to us. The

The Maintenance Center of Excellence of SETLabs has transformed the maintenance engineering life cycle into a platform-based, knowledge-centric, collaborative process that significantly differentiates our maintenance offering. The competitive advantage of our Mantra platform was reflected when it helped us win large deals. Two patents applications have been filed around the Mantra platform. The High Performance and Grid Computing research group has developed two platforms called Gradient and GridScape. Our Gradient platform virtualizes distributed and heterogeneous data sources enabling real-time data integration. This is possible by leveraging existing enterprise infrastructure without any data replication or data movement. Our GridScape platform embodies the vision of a next-generation data center based on a batch workflow distributed over a heterogeneous resource environment. A single dashboard will be available for job management, scheduling, and resource monitoring. The Convergence Lab in SETLabs has developed an entire suite of solutions around the mConnect platform. The team has developed a mobile banking product, a mobile local search solution, and a mobile ticketing and billing solution. Efforts are on to develop a mobile commerce ecosystem consisting of telecom operators, handset vendors, banks, media companies and local content providers. Besides this, the team is working on wireless networking, sensor networks, and network and device convergence. The Web 2.0 research team has built a framework called Web 2.0 Metrices that benchmarks global Web 2.0 initiatives. This has helped customers develop a roadmap for Web 2.0 initiatives in their organizations. Based on their work, the team has presented papers, conducted tutorials and organized workshops in multiple prestigious conferences. The team also conducted several workshops for customers. The Information Management group of SETLabs strengthened its HIMI (Holistic Information Management Infrastructure) platform by adding several features such as text & image analytics, semantic search, and inference and diagnostics. This platform facilitates inference, reasoning, diagnosis, root cause analysis and supports operational and market intelligence across several industrial domains. The research team is engaged with customers from the financial, automobile and healthcare sectors. The Knowledge Engineering research lab of SETLabs has developed IP in rule modeling and execution, knowledge extraction (from text and images), semantic search, knowledge assisted diagnostics, and agent assisted software project management. This IP forms the core of various solutions and is used to improve our knowledge reuse and productivity. The team has filed six patent applications and published several papers. Our Banking and Capital Markets unit has conceived the Financial Technologies Research Center (FTRC) initiative to drive leading edge

Infosys Annual Report 2007-08

| 29

domain thinking and technology on industry / client issues and build / enhance IP based capabilities for our customers. This will enable us to provide specific research offerings to clients by leveraging IP created by our research wing. The Security and Privacy research group, in collaboration with the Banking and Capital Markets unit, has developed TrustedADM, a secure development life cycle methodology, that is being used across Infosys to ensure that all applications designed, developed and maintained by us for our clients or internal or subsidiaries are secure. The e-commerce research group is working on the educational needs to meet the next-generation software development. A module on component based software development has been designed and developed and a curriculum offered to two pilot batches. The entire curriculum is based on Java EE technology and agile development. This group also manages the IBM Software Centre of Excellence and has developed several prototypes of IBM technologies to showcase implementation capabilities and solutions based on our methodology. The 3D commerce research group is exploring if 3D social networking sites such as Second Life can be used to market and sell real-world products. Specifically, the 3D world may be better suited to selling physical items like large appliances than traditional browser-based e-commerce sites. The ability to view the item in 3D may provide a superior shopping experience. The RFID & Pervasive Solutions Practice focuses on business solutions that leverage the convergence of sensing and access technologies. The group has developed key Intellectual Property (covered under multiple patent filings) and a core platform that supports innovative applications across business domains. These solutions are offered as managed information services to global clients from industries such as gaming and entertainment, consumer retail, logistics, healthcare and manufacturing. The high-value solutions developed by the group include Smart Visual Merchandising, Value Chain Visibility and ShoppingTrip 360°.

Benefits Our efforts in R&D have helped us offer new services to clients in the areas of Web 2.0, SaaS, Enterprise Architecture, IT Governance, etc. Based on the technology platforms developed by multiple research groups, we are creating client-focused business solutions. Our R&D efforts have helped us win large deals in legacy modernization and collaboration across industry verticals.

Future plan of action We will collaborate with leading national and international universities, product vendors and technology start-up companies with increasing focus. These collaborations will be leveraged toward the creation of platforms and solutions that enhance the GDM principles of automation, collaboration and assembly. Our areas of research include software engineering, network and device convergence, grid computing, knowledge engineering, information management, and security and privacy.

Recognition of Infosys R&D The Field Optimization Suite, jointly developed by us and British Telecom (BT), won the National Outsourcing Association (NOA) award for Innovative Outsourcing Project of the Year 2007.

30 |

Power of talent

BT Research and SETLabs, the companies’ respective R&D divisions, worked in collaboration, utilizing their respective intellectual properties. The solution created and rolled out at the end of 2006 is now a fully automated resource management system that uses advanced intelligent algorithms to enhance a company’s productivity by accurately forecasting, optimally planning and positioning a large field workforce to adapt to changing demands. Further, BT has signed a memorandum of understanding (MoU) with us to collaborate on research and innovation. We partnered with Agricultural Co-operative Development International and Volunteers in Overseas Co-operative Assistance (ACDI / VOCA) to develop an information and communication technology (ICT)-enabled application that would improve efficiencies in the agro supply chain in India. The solution is built on our TruSync, a context-aware, clientserver solution designed for situations with limited or no network availability and allows for peer-to-peer (P2P) synchronization between field agents without connecting to a central server.

Expenditure on R&D in Rs. crore

2008 201 – 201 1.3%

Revenue expenditure Capital expenditure Total R&D expenditure / total revenue

2007 167 – 167 1.3%

Foreign exchange earnings and outgo Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services, and export plans During the year, 98.6% of our revenues was derived from exports. We have established a substantial direct marketing network around the world, including North America, Europe and Asia Pacific. These offices are staffed with sales and marketing specialists, who sell our services to large, international clients.

Foreign exchange earned and used in Rs. crore

Earnings Outflow Net foreign exchange earnings (NFE) NFE / Earnings

2008 14,490 6,788 7,702 53.2%

for and on behalf of the Board of Directors

S. Gopalakrishnan

S. D. Shibulal

Chief Executive Officer and Managing Director

Chief Operating Officer and Director

Bangalore April 15, 2008

2007 12,156 5,653 6,503 53.5%

Annexure to the directors’ report b) Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of employees) Rules 1975, and forming part of the directors’ report for the year ended March 31, 2008 Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Abhay M. Kulkarni Abhijit Sen

VP, BCM AVP and Head – Bhubaneswar Development Center DM, PLES AVP, ES Business Manager, ES AVP, Corporate Marketing Senior Principal, Consulting Solutions DM, RETL

BE BE

41 41

Feb 26, 1990 Jan 14, 2002

20 19

BE B.Tech B.Tech, PGD B.Tech (H) B.Tech

42 35 34 42 44

Dec 26, 1997 Jul 1, 1993 Sep 11, 2000 Nov 10, 2003 Jan 29, 2007

20 15 11 21 20

27,17,191 38,81,543 25,16,967 46,25,975 39,66,309

B.Sc, MCA

37

Apr 2, 2001

14

DM, BCM Senior Manager, Quality Senior Principal, Consulting Solutions Principal Architect, MFG AVP, BCM Principal Consultant, ES Senior Manager, Systems, CCD DM, MFG Unit Operations Manager, RETL GPM, IHL GPM, Corporate AVP, PE Group Manager, Go-to-Market, Corporate Marketing DM, EUS Principal Architect, SETLabs DM, IHL AVP, IVS AVP, CME DM, MFG Unit Operations Manager, NMS VP and Head, IVS Principal Consultant, ILI

BE, MBM B.Sc, MCA Diploma, AMIE, B.Sc, MBA B.Tech, PGD B.Sc, M.Sc BE, MMS BE, M.Tech B.Sc (H), M.Sc BE BE B.Sc (H), MCA BE BE, MBA

41 41 48

Feb 20, 1998 Dec 14, 2004 Feb 12, 2007

20 19 28

26,49,280 IT Solutions (India) Pvt. Ltd., Accounts Manager – Delivery 27,76,036 Union Pacific Rail, PL 29,98,330 American Express Pvt. Ltd., Director 28,94,246 Airtel Enterprises Service Carrier, General Manager

34 42 37 44 37 34 32 40 36 42

Aug 31, 1998 Jan 22, 1998 Jun 12, 2000 Feb 24, 1999 Jun 24, 1996 Jan 22, 2001 Jul 15, 1996 Aug 24, 1998 Nov 27, 1995 Jul 12, 2000

11 22 13 23 12 11 12 17 14 18

26,49,475 31,09,655 24,10,996 24,95,131 25,61,155 30,04,820 26,83,559 28,62,203 31,90,106 33,20,305

B.Tech, ME B.Tech BE B.Sc BE B.Tech, M.Tech BE B.Tech B.Com, MBA

36 39 35 35 37 39 35 47 41

Aug 5, 1996 Apr 17, 2003 Jan 6, 1997 Sep 24, 2001 Oct 7, 1992 Mar 27, 2001 Nov 7, 1994 Aug 28, 2000 Jan 3, 2000

13 16 14 15 15 16 13 25 18

29,42,386 25,56,254 32,09,924 47,60,519 73,17,024 30,18,686 29,04,453 69,38,806 24,32,710

TCS Ltd., Assistant System Analyst Unit Trust of India, Asst. General Manager PricewaterhouseCoopers Ltd., Consultant Air India, Deputy Manager – Systems — Sony India Ltd., System Engineer — James Martin & Co., Consultant Wipro Infotech, Customer Support Engineer PricewaterhouseCoopers Ltd., Senior Manager – Transaction Services Bajaj Auto Ltd., Engineer Venturi Technology Partners, Senior Consultant Rourkela Steel Plant, Manager Aztec Software, Senior Manager – QA — TCS Ltd., Assistant Consultant — Trigent Software, General Manager Wipro Infotech, Manager – Training

Principal Architect, BCM Principal Architect, BCM DM, RETL DM, IMS AVP, MFG Senior Principal, Consulting Solutions DM, MFG Principal Consultant, SI DM, MFG Principal Solutions Manager, SI DM, RETL GPM, MFG DM, Finacle Product Manager, Finacle AVP, HRD

B.Tech B.Sc BE B.Tech BE, ME B.Tech

36 34 36 37 40 37

Mar 26, 2007 Jun 3, 1996 Sep 8, 1995 Dec 8, 2003 Feb 24, 1992 Jun 2, 2003

15 15 15 16 16 17

24,85,321 26,12,055 26,16,503 24,54,189 38,73,289 25,55,346

TCS Ltd., Senior Consultant Integra Micro Systems, Developer HAL, Engineer P.C.S. Industries Ltd., Area Manager — Siemens Ltd., Manager

BE BE B.Tech (H) BE, M.Sc B.Tech BE B.Sc, M.Sc BE, PGD B.A, M.A.

42 33 35 41 34 35 35 42 38

May 2, 2005 Feb 26, 2001 Jun 26, 1995 Dec 31, 1996 Jun 27, 1994 Aug 26, 1996 Sep 4, 1995 Aug 30, 2004 Oct 12, 2000

18 12 13 19 14 12 14 17 16

32,06,280 24,25,990 32,48,139 31,69,187 31,97,120 26,77,794 30,51,153 25,42,947 35,04,922

DM, PLESs Group Manager, Go-to-Market, Corporate Marketing Senior Manager, Systems, CCD AVP, EUS DM, RETL

Diploma, BE BE, MBA

37 37

Feb 2, 1998 Dec 23, 2004

18 13

Target Case Technologies, Director Tata Technologies India Ltd., Consultant — CBSI, Developer — — Aadson Computers, Developer Polaris Software Lab Ltd., Principal Consultant ICICI Personal Financial Services Ltd., Business Manager, South 26,17,122 IISc, Associate 34,66,469 Microsoft Corporation Pvt. Ltd., Business Manager

BE BE B.Sc, M.Sc

38 36 42

Feb 7, 2000 Feb 7, 1994 Oct 12, 2000

16 14 21

30,55,209 Zen Computers, Networking Consultant 36,93,452 HCL-HP, Customer Engineer – Trainee 31,86,747 DSQ Software Ltd., Assistant Consultant

B.Sc, ACA, ACS, AICWA BE Diploma, AMIE, PGD BA, MA, MBA B.Tech

43

Sep 2, 1991

21

62,92,500 Amco Batteries Ltd., Senior Accounts Executive

52 36

Dec 17, 1997 Aug 13, 1999

29 18

35,46,491 BEL, Manager and Dept. Head of R&D 27,21,118 Tata Technologies India Ltd., Deputy Manager, SAP

40 35

Apr 18, 2005 Jan 27, 1998

16 15

24,63,682 i-Flex Solutions Ltd., Consultant 26,29,260 L&T Ltd., Executive Engineer

Abhijit Vishwas Ghaskadbi Abhishek Abhishek Goyal Aditya Nath Jha Aditya Nidamarthy Ajayan Pillai Ajit Kumar Sarangi Akhila Ramachandran Jha Amer Singh Thakur Amit Gaonkar Amit Kumar Bhadra Amit Madhav Bakre Amit Sahakundu Amiteshwar Dayal Seth Ammayappan Marimuthu Amol Barbare Amruta Kumar Mohanty Anand J. Raghavan Anand Krishna Anil Kumar P. N. Anoop Nambiar Anuj Kumar Anuradha Biswas Anurag Vardhan Sinha Arindam Das Arun Kumar H. R. Arun Ramu Aruna Chittaranjan Newton. Ashish Sharma Ashok Gopinath Ashok K. Bangera Ashutosh Saxena Ashwathanarayana Shastry Atul Agrawal Atul Alase Atul Kumar Atul Soneja Aveejeet Palit Avinash Chandrakar Avinash G. S. Babu N. S. Balachandran R. Balachandran T. R. Balaji R. Balaji Sampath Balaji Srinivasa Rao Ghat Balakrishna D. R. Balakrishnan Mayilarangam Sundarajan. Balakrishnan V. Balashankar Balasubramanian Venkatachalam Basudev Banerjee Bhanu Prasad Narayana

Chief Financial Officer AVP, PE DM, ES Product Manager, Finacle GPM, IHL

Gross Previous Employment – Designation remuneration (Rs.) 57,48,005 Tisco, Graduate Trainee 35,67,288 Visa International, Department Head TELCO, Senior Engineer — Asian Paints, Area Manager Big Leap, CEO Lucent Technologies, Technical Director

Infosys Annual Report 2007-08

| 31

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Bharadwaj K. P. Bhaskar Babu K. Bhaskar Chakravarty Bhaskar Chicknanjundappa Bhaskar Kakuturu Bhuvanesh Kumar Shukla Bhuvaneswari Sundaram Binod H. R. Binokumar P. C. Birinder Soin

DM, CME DM, MFG AVP, Corporate Planning AVP and Head – Mangalore SEZ

BE BE B.Tech BE, MS

44 35 35 41

Dec 1, 1997 Nov 7, 1994 Jun 26, 1995 Sep 2, 1998

22 13 13 15

Gross remuneration (Rs.) 27,63,101 29,10,137 30,38,196 49,64,753

B.Tech BE B.Sc, MCA BE B.Tech BE, MBA

36 39 43 45 37 36

Dec 13, 1996 Mar 29, 2004 Aug 28, 2000 Aug 2, 1993 Dec 9, 1996 Dec 9, 2002

15 18 20 22 14 13

26,02,051 24,43,857 38,95,372 72,67,071 24,41,157 25,18,788

Brundhabhan M. S. Chandra Shekar Kakal

DM, MFG Principal Architect, SETLabs AVP, BCM SVP and Head – Purchase DM, CME Senior Principal, Consulting Solutions DM, EUS SVP and Head, ES

37 47

Nov 27, 1995 Mar 1, 1999

16 24

26,61,078 L&T Ltd., Engineer – Marketing Services 77,84,561 Ramco Systems, Product Manager

Chandrakanth Desai Chandraketu Jha

AVP, CCD AVP, Finance

BE Diploma, BE, MBA, PGD B.Tech, M.Tech B.Com, CA

52 44

Jan 17, 2000 Jun 26, 2000

31 21

Charles Henry Hawkes Chetan Kumar Gupta

VP, Facilities DM, PE

B.Sc BE

48 36

Nov 15, 1996 Mar 13, 1995

23 14

35,96,427 Indian Air Force, Wing Commander 53,20,456 Global Business Dimensions, Head of Accounts & Finance 36,54,356 Trans Oceanic Travel, Manager 28,19,431 ITI Ltd., Assistant Executive Engineer

Principal Researcher, SETLabs GPM, IS GPM, RETL DM, RETL AVP, Finacle AVP, Finance DM, IVS VP, NMS GPM, MFG DM, IHL Director and Head – CDG, IS and Quality & Productivity Dinesh Mohan Senior Principal Consultant, ES Dinesh R. VP, RETL Dipankar Khasnabish Group Lead, Corporate Planning, India Business Unit Dipayan Mitra Senior Principal, Consulting Solutions Dorpo Narayan Chaudhuri Principal, SSDD

B.Sc, M.Sc, Ph.D B.Com, ACA B.Tech BE B.Tech BE BE B.Sc, ME B.Tech, PGD B.Sc, M.Sc, MBA B.Sc, M.Sc

37 34 35 40 45 37 39 44 36 39 53

Nov 11, 2002 Jun 29, 1998 Aug 26, 1996 Feb 15, 1993 Oct 10, 1996 Aug 10, 1992 Nov 27, 1995 Sep 14, 1987 Apr 2, 2001 Dec 14, 1998 Sep 1, 1981

8 12 12 17 23 16 18 21 15 18 35

24,23,193 33,27,812 27,07,897 24,62,912 49,72,763 34,06,799 25,13,276 58,09,272 25,01,378 29,93,501 82,03,309

BE, MBA BE B.Tech, PGD

37 39 40

Aug 1, 2005 Oct 1, 1990 Sep 6, 2004

13 18 15

28,41,354 California Software Co. Ltd., VP 51,71,348 — 24,11,508 Tata Elxsi Ltd., Corporate Manager

B.Tech

40

Jun 27, 2006

17

34,95,794 Gail (India) Ltd., Senior Manager

BCS

38

Nov 3, 2005

14

Elamurugan V. S. Eshan Joshi

GPM, RETL AVP – Immigration Operations, HRD DM, BCM DM, RETL Senior Manager, Quality

BE B.Tech, PGD

34 35

Dec 9, 1996 Sep 2, 1998

14 11

26,70,997 IBM Global Services India Ltd., Senior Development Manager 24,67,865 Thermax Ltd., Executive 47,39,417 KLG Systel Ltd., HRD

BE B.Sc BE (H), ME

38 36 49

Jul 15, 1996 Sep 8, 1995 Jul 1, 2005

16 16 26

VP, IHL Principal Consultant, Finacle GPM, IHL GPM, IS VP, HRD Principal Architect, NMS DM, RETL SVP, ILI AVP, E&R Practice Manager, Finacle Head, Product Strategy & Management, Finacle AVP, Finacle CEO and Managing Director DM, ES

BE (H), PGD B.Tech, MBA B.Tech, PGD B.Tech, M.Tech B.Com, MBA BE BE, PGD BE, PGD B.Tech BE, M.Tech, Ph.D BE, ME

45 38 34 44 43 39 35 57 45 44 52

May 2, 1994 Feb 28, 2001 Jun 8, 1998 Sep 24, 2001 Apr 1, 1993 Jun 10, 1996 May 8, 1995 Jan 22, 1999 Nov 8, 2000 Feb 23, 1996 Oct 2, 2002

21 13 11 18 19 17 13 33 23 14 28

25,81,447 Aptech Computer Education, Executive 29,21,876 L&T Ltd., Technical Assistant 29,39,806 Karna Softek India Pvt. Ltd., Project Director & CTO India 64,64,354 Asian Paints India Ltd., Systems Executive 26,57,118 HDFC Bank, Senior Manager (Corporate Banking) 28,06,641 Reliance India Ltd., Graduate Engineer Trainee 32,98,942 Trigyn Technologies Ltd., Practice Manager 41,14,665 NIIT Coimbatore, Business Manager 33,63,448 Godrej & Boyce Manufacturing, Manager 29,20,930 MICO, Trainee 73,03,329 ANZ Grindlays, Director and Head – Operations 34,09,108 CBSI, Development Manager 26,06,268 Islamiah Inst., Lecturer – Civil Engineering 29,23,977 A. T. Kearney Management Consulting, Senior Principal

B.Sc B.Sc, M.Sc, M.Tech B.Tech, PGD

46 53 36

Sep 8, 1994 Feb 1, 1981 Oct 3, 2000

26 29 13

37,13,750 Marketing Business Services, Executive 81,45,867 Software Sourcing Company, Technical Group, VP 29,91,675 Intelligroup Asia, Manager – Business Development

Divisional Manager, MFG DM, RETL DM, PE Group Manager, UET, Finacle DM, MFG DM, PE DM, NMS Group Test Manager, IVS

BE BE BE, MBA B.Sc, CAIIB, M.Sc BE, ME BE BE Diploma, BE, MBA

37 36 49 47 37 39 36 38

Nov 7, 1994 Feb 7, 1994 Aug 8, 1997 Sep 29, 2000 Jun 26, 1995 Oct 5, 1998 May 2, 1994 Mar 5, 2007

14 14 25 25 14 18 14 17

37,12,869 26,50,911 25,45,096 24,59,178 29,54,517 29,82,790 29,94,102 24,34,775

VP and Head, Finacle Senior Manager, Quality

B.Sc, LLB, PGD BE, PGD

46 37

Dec 8, 1993 Nov 1, 2004

21 15

BPL Systems & Projects Ltd., Trainee Engineer Tata Electronics, Trainee Axes Technologies, Senior Software Design Engineer Canara Bank, DBA Officer Siemens Ltd., Executive Spectrum Infotech, Senior Design Engineer BPL Ltd., Trainee Honeywell Technology Solutions Lab Pvt. Ltd., Engineer Fellow 57,02,096 Canara Bank, Officer 28,22,769 GE, Asst. VP – Resource Management

DM, RETL

BE

36

Jan 6, 1997

13

29,80,362 HPCL., Production Incharge

Dayasindhu N. Deepak Bhalla Deepak Gupta Deepak Kamath B. Deepak N. Hoshing Deepak Padaki Dhanasekaran Kalimuthu Dheeshjith V. G. Dhruba Bagchi Dinesh Ganesan Dinesh Krishnaswamy

Feroz Syed Ganapathi Bhat Balike Ganesan Arunachalam Kaushik Ganesh Gopalakrishnan Gautam Bandyopadhyay Gautam Khanna Geetha Das Geetha Kannan Ghanashyam Wagle Girish A. R. Girish G. Vaidya Gomatam Srishail Chari Gopal Krishna Sharma Gopal Sondur Gopal T. N. Gopalakrishnan S. Gopikrishnan Gouri Ramachandran Gopikrishnan Konnanath Govindaprakasha C. H. Guru Anand K. C. Guru Raja C. Guru S. Sangameshwar Guruprasad R. A. Gururaj B. Deshpande Hanumanta Krishtappa Dasar Haragopal Mangipudi Hareshkumar Mahadevrao Amre Harish Srinivas Gudi

32 |

Power of talent

Previous Employment – Designation

L&T Ltd., Executive — — Indus International, PL Hindustan Cables Ltd., Engineer Ness Technologies India Ltd., Program Manager Citibank, Assistant VP Mico, Senior Engineer, Technical Sales L&T Ltd., Assistant Engineer Apnaloan.com, Marketing Manager

Tata Elxsi Ltd., Manager – Business Strategy JK Corp. Ltd., Manager — BPL Sanyo Tech. Ltd., Assistant Engineer Unisys, Senior Systems Analyst — ITI Ltd., Assistant Manager — HCL Perot Systems, Associate CMC Ltd., Manager – SI Patni Computer Systems Ltd., Senior Software Engineer

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Harsha R. Herle Hasit G. Trivedi Hemalatha Murugesan Hemant Kumar Indira Krishnamurthi Indira R. Indranil Mukherjee Ishwar C. Halalli Jagadish Babu Vishwanatham Jamuna Ravi Janardan Wasudeo Pendharkar Jayaram B. G. Jayaraman Nair Jaymalya Palit Jitendra Sangharajka D. John Premkumar R. Jyothi Shriranga Nayak Kandhaswamy Natarajan Sivakumar Kannan Amaresh

GPM, Finacle DM, NMS Group Test Manager, IVS GPM, ES GPM, NMS DM, IVS DM, ES AVP, CME DM, EUS

BE BE Diploma, BE BE, M.Tech B.Sc, MCA B.Sc, M.Sc AMIE BE, M.Tech BE

34 34 37 37 36 42 37 45 34

Apr 28, 1997 Apr 28, 1997 Jun 7, 2004 Feb 13, 1995 Dec 1, 2000 Dec 27, 1995 Dec 4, 1995 Jan 19, 1996 Nov 7, 1994

13 13 12 14 13 17 13 22 13

VP, BCM Principal Consultant, IMS

BE BE

45 43

Nov 19, 2001 Jul 15, 2002

23 22

52,06,794 Trigent Software Ltd., VP Head – Operations 27,26,158 DCM Data Systems, Specialist

AVP, E&R AVP, CME Product Manager, Finacle AVP, IS DM, MFG DM, IHL Principal, SSDD

B.Sc (H), M.Sc M.Sc Integrated B.Tech (H) Diploma, BE BE BE BE

55 37 36 40 35 39 36

Dec 10, 1999 Jun 22, 1992 Jun 26, 1995 Sep 1, 1999 Dec 9, 1996 Feb 22, 1993 Feb 16, 2006

31 16 13 19 14 17 16

38,93,470 41,63,675 27,25,136 34,70,322 26,16,583 26,02,969 24,18,535

Senior Principal, Consulting, BCM (Sales) GPM, ES Principal Consultant, PE Principal Architect, CCD AVP, HRD GPM, NMS DM, RETL GPM, SI AVP, CCD DM, ES VP, RETL

BA, CA

39

Jun 22, 2000

15

B.Sc, B.Tech BE BE BE, PGD BE BCS, MCS BE B.Sc BE B.Tech, M.Sc Engg

45 34 34 36 34 37 41 39 36 47

Feb 13, 2006 Sep 6, 1999 Sep 17, 1997 Sep 11, 2000 Oct 5, 1998 Feb 1, 1999 Mar 21, 1992 May 2, 1991 May 2, 1994 Jan 13, 1986

20 14 13 12 13 15 19 18 15 25

Principal Architect, SI Principal Architect, SETLabs VP, Finance

34 32 40

Jun 27, 1994 Dec 4, 2000 Sep 15, 1997

14 10 16

38 35 43 41 38

May 2, 1994 Jun 27, 1994 Mar 15, 2007 Jan 2, 1995 Feb 13, 1995

16 14 17 19 13

DM, CME AVP, E&R DM, CME DM, Finacle DM, ES

B.Tech B.Tech, PGD B.Com, ICWA, ACA BE B.Tech B.Sc, B.Tech BE, ME Diploma, B.Tech, M.Tech BE, M.Tech BE, ME BE, ME BE B.Tech, MBA

36,87,766 Standard Chartered Bank, Business Development Manager 28,22,669 Tata Technologies Ltd., Program Manager 25,05,076 Siemens IS Ltd., Associate Consultant 24,35,706 Indian Express, Assistant Engineer 34,74,119 GE Capital Services India Ltd., Manager 24,29,035 Aarti Corporate, Developer 31,56,386 Kale Consultants Ltd., Systems Analyst 24,42,639 Ashok Leyland Ltd., Industrial Engineer 37,52,546 Frazer Techno Circuits Ltd., Marketing Executive 24,18,187 Spectra Industries, Developer 60,29,698 Urban Transport Development Corporation, Research Assistant 32,16,997 — 31,84,424 Right Angles.com India Ltd., CEO 47,64,897 Bennett Coleman & Company Ltd., Senior Business Correspondent 31,26,701 Malnad College of Engg., Lecturer 32,11,995 — 25,12,151 Patni Computer Systems, PM 40,34,878 L&T Ltd., Executive 30,86,097 —

37 41 37 35 45

Feb 1, 1999 Sep 24, 1993 Dec 14, 1998 Oct 6, 2005 Apr 10, 2006

14 18 15 13 22

24,86,136 31,80,072 29,36,474 28,85,265 28,36,248

DM, IHL

BE

37

Jun 19, 2000

15

29,04,017 TCS Ltd., Asst. Consultant

Regional Manager, Finacle DM, Finacle General Manager, Finance Principal Architect, PE DM, Finacle, BCM Principal Consultant, IMS

BE, PGD B.Sc B.Com, ACA. B.Tech B.Sc, IETE Grad B.Sc

38 43 35 31 42 38

Jun 3, 1996 May 15, 2000 Sep 6, 1999 Oct 13, 1997 Dec 8, 2003 Jan 4, 2007

14 24 10 10 18 18

24,68,356 25,29,274 28,39,117 25,64,462 24,33,287 27,42,228

B.Tech B.Tech

35 33

Jun 27, 1994 Jun 24, 1996

14 12

Manohar Madgula Atreya Manohar Moorthy Manoj Kumar Jaiswal Mayank Gupta Meera Govind Rajeevan Milind Govind Kolhatkar

DM, BCM Principal Architect, MS Solutions Practice Unit Operations Manager, IMS Principal Architect, SETLabs Principal Consultant, ILI, ILI Principal Architect, SETLabs AVP, Corporate Planning Product Manager, Finacle

Wipro Fluid Power, Executive Canara Bank, Manager Ford India Ltd., Financial Analyst — Wells Fargo & Co., Technology Manager HCL Technologies Ltd., Deputy General Manager – Projects 26,69,446 — 30,84,132 —

B.Tech, PGD B.Tech BA, MBA, M.Sc BE, PGD B.Tech, PGD B.Tech, PGD

36 37 43 32 40 38

Apr 28, 1997 Jun 22, 1992 Dec 11, 2002 Dec 11, 2000 Aug 7, 1995 Sep 5, 2001

14 16 16 9 17 16

27,17,385 24,84,999 25,07,767 30,37,138 41,04,682 27,85,417

Milind Vasantrao Pande

GPM, SSDD

41

Feb 6, 2006

20

Milind Vinod Dikshit

AVP, IMS

Diploma, BE, M.Tech, Ph.D B.Tech, PGD

36

Apr 5, 2004

11

Mitesh Indravadan Bhatt

GPM, IMS

BE, PGD

44

Dec 2, 2004

23

Kannan Vaikom Krishnan Karthik Srinivasan Kathiresan T. Kaushik Ray Ketan Jobanputra Kiran M. Potdar Kiran N. G. Koushik R. N. Krishnakant P. Gaonkar Krishnamoorthy Ananthasivam Krishnan Ganapathy Krishnan Narayanan Krishnan S. Krishnaswamy S. Kshitij Kumar Kumar Kannemadugu Lakshmanan G. Lakshmi Narasimha Rao Gunda Lalit Kumar Bansal Latha A. Madhavan V. B. Madhu Krishna Iyengar Madhurakavi Venkata Krishna Mohan Mahalingeshwar S. Dhaded Mahesh Dutt Kolar Mahesh R. Mala Chandrasekhar Manesh Sadasivan Manikandan Venkatraman Manish Israni Manish Kumar Mehta Manish Srivastava

DM, SSDD DM, BCM Group Test Manager, IVS DM, SaaS DM, CME

Gross remuneration (Rs.) 24,43,489 29,35,770 25,39,569 24,52,244 26,18,075 26,69,211 24,13,530 43,44,902 24,39,000

Previous Employment – Designation

Kirloskar Electricals, Engineer Global Tele Systems, Member – Strategic Planning Network Associates, Quality Assurance Manager CSM Pvt. Ltd., Associate TCS Ltd., IT Analyst Lakshmi Motor Credit, Officer - Systems Chipsoft Technologies, Customer Support Engineering AT&T SSTL, Manager – Technical —

Raffles Software, PM — — L&T Ltd., Executive, IS L&T (ECC), Electrical Engineer Dept. of Management Studies, IISc, Project Assistant Cosmonet Solutions Pvt. Ltd., Managing Director

Fujitsu Optel Ltd., Executive Engineer (System) PSNA College of Engg, Associate Lecturer TCS Ltd., Consultant Accenture Services Pvt. Ltd., Manager Hexaware Technologies Ltd., AVP

L&T Ltd., Sales Manager — NIS, Deputy General Manager Asian Paints (I) Ltd., Area Manager Srishti Open Systems, Associate Concio Technologies, Business Analyst & Practice Manager 27,58,125 Patni Computer Systems Ltd., Head – ITG, COE 36,33,982 Bangalore Labs Pvt. Ltd., Director & Head – Global Delivery 24,16,452 Cable and Wireless, Head – Service Management

Infosys Annual Report 2007-08

| 33

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Mohammed Sayeeduddin Mohan Kumar K. L. Mohandas Pai T. V.

DM, BCM Group Test Manager, Finacle Director and HeadAdministration, E&R, Finacle, HRD and ILI DM, EUS AVP, BCM

BE, MBA B.Sc, CAIIB LLB, B.Com, FCA

40 41 49

Dec 4, 1995 Nov 3, 1997 Oct 17, 1994

19 20 26

B.Tech B.Tech

33 36

Jun 26, 1995 May 7, 2001

13 16

VP and Head, CCD Senior Principal, Consulting Solutions AVP, NMS DM, Corporate DM, PE DM, RETL Head, User Education, Finacle

B.Sc B.Com, BGL, ICWAI, ACS B.Sc, MCA B.Tech BE BE, PGD B.Sc, LLB, CAIIB, MA. BE, ME BE BE B.Tech.

44 42

Dec 1, 1984 May 3, 2000

23 22

39 36 39 37 53

Aug 27, 1992 Aug 29, 1994 Jul 3, 1997 Oct 4, 2000 Mar 6, 1995

17 14 17 14 32

27,44,329 — 39,14,922 Systems Solutions and Services Consulting Inc., Account Manager 77,22,341 — 26,49,103 Life Insurance Corporation of India Ltd., Administration Officer 44,33,431 PSI-Bull, Systems Executive 28,88,569 — 25,63,082 Axes Technologies, Developer 28,66,844 TCS Ltd., Assistant Consultant 29,13,133 State Bank of Hyderabad, Manager (Credit)

42 38 51 52

Mar 23, 1992 Feb 10, 1992 May 2, 2005 Jul 1, 1981

16 16 28 30

44,20,161 29,90,106 32,47,591 81,38,687

B.Tech. B.Tech. B.E., PGD

38 36 42

Jul 5, 1993 Jul 5, 1993 Apr 25, 1997

16 15 20

29,11,772 BPL Systems & Proj., Assistant Engineer 36,53,426 — 24,06,375 MSEB, General Engineering

VP and Head, IND DM, Finacle DM, IHL

B.Sc. B.E. B.Tech.

41 39 35

Mar 8, 1993 Dec 17, 1990 Jun 27, 1994

21 17 14

63,65,800 PSI Data Systems Ltd., Senior Software Engineer 30,90,804 — 31,50,413 —

VP and Head, Hyderabad Development Center Principal Architect, MS Solutions Practice DM, IND (Sales) Principal, Product Incubation Engineering DM, IHL Senior Principal, Consulting Solutions GPM, CME General Manager, CAG, Finance Senior Principal Consultant, ES DM, IVS Principal Architect, SI AVP, IMS Unit Operations Manager, MFG DM, IVS DM, CME

B.E., PGD

40

Jan 29, 2001

18

Diploma, B.Tech., MS B.Tech. B.E.

37

Aug 13, 1997

14

54,63,476 Ramco Systems, Project Director – e-Commerce Solutions 25,25,555 Life Line Computers, Developer

35 34

Jun 27, 1994 Sep 4, 2006

14 13

24,11,458 — 37,28,865 Manthan Systems, Director

B.E. B.E., PGD

34 41

Apr 28, 1997 Dec 18, 2006

13 20

28,98,418 Thermax Fuji Elec., Executive 37,64,097 Bharti Airtel Ltd., General Manager

B.E., MBA B.Com., C.A. B.E. Diploma, B.E. B.E. B.Tech. B.Sc., M.Sc. B.E. B.E., PGD

36 36 35 37 36 34 44 39 42

Dec 4, 2006 Apr 9, 1997 Jul 15, 2002 Feb 13, 1995 Jul 15, 2002 Aug 28, 1995 Jan 5, 1998 Feb 5, 1996 Jan 25, 2001

15 14 14 15 15 13 21 19 21

26,46,890 27,06,102 27,46,858 34,75,783 26,79,355 32,37,239 29,88,743 33,72,835 25,40,439

DM, CME GPM, CME

B.E., M.E. B.E.

39 34

Dec 30, 2002 Jan 5, 2001

15 14

Amdocs Ltd., Development Manager Fauna International, Manager PricewaterhouseCoopers Ltd., Consultant Siemens Ltd., Executive Ciber Inc., Technical Architect — Eid Parry (I) Ltd., Senior Systems Executive L&T Ltd., Executive Tata Infotech Ltd., Senior Manager – Wap Competency Centre 25,29,438 Bisys, Senior PM 26,06,047 Harita Infoserve Ltd., Assistant Manager

B.E. B.E. BDS B.E., PGD

36 36 37 38

Nov 7, 1994 Jan 5, 2004 Mar 5, 2007 Aug 5, 2002

14 13 14 15

25,58,405 24,14,997 26,50,824 24,62,165

Paramesh Ramasamy

DM, IHL GPM, IMS Principal, Consulting Solutions Senior Principal, Consulting Solutions DM, IVS

B.E.

34

May 5, 2003

14

Parameswar Y. Parthasarathy M. A.

VP, PE AVP, SSDD

52 58

Oct 14, 1996 Aug 30, 1999

29 36

Pinaki Ghosh Piyush Jain Prabhakar Devdas Mallya

PR, Principal Researcher, SETLabs DM, PE VP, Security Audit & Architecture Group Unit Operations Manager, MFG DM, MFG GPM, BCM Principal Architect, SaaS Principal, Consulting Solutions

B.E., M.Tech. Diploma, B.E., PGD B.Sc., M.Sc., Ph.D B.E. B.Tech., M.Tech.

24,42,829 Alcatel Development Center Chennai Pvt. Ltd., Core Technical Manager 71,55,139 C-Dot, Divisional Manager 48,41,447 IMR Global Ltd., Group Manager

42 36 53

Mar 14, 2005 Jun 10, 1996 Dec 15, 1986

11 15 38

27,67,991 GE Medical Systems India Pvt. Ltd., IP Leader 26,74,108 Square D S/W Ltd., Developer 39,89,761 IDS, AVP

B.Tech., PGD B.E. B.E. B.E. B.E.

37 35 35 35 36

Jun 12, 2006 Jun 28, 2004 Aug 28, 1995 Jan 16, 1995 Oct 16, 2006

15 14 13 14 14

26,44,009 26,97,405 26,35,348 24,49,313 26,43,433

Group Test Manager, IVS DM, CME DM, ES

B.E. B.Tech. B.E.

32 34 38

Oct 13, 1997 Feb 9, 2004 Jul 1, 1993

10 12 17

26,17,837 — 31,52,700 Accenture Services Pvt. Ltd., Associate Manager 27,10,567 Ashok Leyland Ltd., Executive Plant Engineer

Principal Consultant, Finacle

B.E.

35

Nov 27, 1995

13

25,02,917 Grasim Industries, Trainee

Mohit Saxena Mritunjay Kumar Singh Muralikrishna K. Muthusubramanian B. Muthuvel Gajapathi Nabarun Roy Nagabhushana Samaga Nagaraj Nanjundaram Nagaraj R. N. Nagaraj S. Nagarajan Srinivasan Nagendra R. Prasad Nandan M. Nilekani Narayan B. Narendra Kumar Gogula Narendra Murari Sonawane Narendran Koduvattat Naresh Kumar K. Naresh Nath Kumar Duddu Narsimha Rao Mannepalli Naveen Kumar S. Naveen Somarajan Jain Navin Dhananjaya Neeraj Arvind Joshi Neeraj Sullhan Nikhil Balkrishna Datar Niladri Prasad Mishra Nilanjan Chatterjee Niranjan V. S. Nirmallya Mukherjee Nishikant Nigam Nithya Prabhakar Nithyanand Y. Nitin Tularam Mahajan Padma Kumar Padma Ravikumar Gopalswami Padmanabha Thirumalaiah Pandiya Kumar Rajamony Pankaj Gupta Pankaj Kumar Sharma

Prabhat Kaul Prabhat Kumar Das Pradeep Jain Pradeep Kumar M. Pradeep Thazhichayil Yesodharan Pradeep Yadlapati Pramod Prakash Panda Pranav N. Rao Prasad C.

34 |

Power of talent

AVP, SI DM, CME AVP, E&R Co-Chairman of the Board of Directors DM, CME AVP, EUS GPM, IS

Gross remuneration (Rs.) 27,99,095 29,49,803 1,77,44,026

Previous Employment – Designation

ITI Ltd., Assistant Vijaya Bank, In-charge Prakash Leasing Ltd., Executive Director

STUP Consultants, Design Engineer — Innosoft Consultants Pvt. Ltd., Director Patni Computers Systems Pvt. Ltd., Assistant PM

Central Manf. Tech., Assistant ANZ Information Technology, Associate PM Cerner India, Engg. Manager Credit Agricole Indosuez, Manager

ABB Ltd., Assistant VP – Operations Soft Projex Inc., Director Project — Square A Systems, Consultant Wipro Technologies Ltd., Principal Consultant

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Prasad Subramanian C. S. Prasanna S. R. Prasanth Samavedam Prashant P. Pawar Praveen Bheemachar Maddi Praveen Kumar Praveen Kumar K. Praveen Kumar Sinha Praveen Viswas

DM, Finacle GPM, SaaS DM, BCM (Sales) GPM, NMS Principal Architect, CCD

B.Sc., M.Sc. B.E. B.Tech. Diploma, B.E. B.E.

37 35 35 33 36

Mar 1, 1994 Nov 7, 1994 Jun 26, 1995 Jul 15, 1996 Oct 12, 2000

16 13 13 12 13

Gross remuneration (Rs.) 32,94,420 33,45,136 25,65,599 25,67,434 25,08,935

DM, Finacle AVP, RETL DM, BCM Senior Principal Legal Counsel, Finance SVP and Head, RETL AVP, Finacle GPM, CME

B.Tech. B.E. Diploma, B.Com. B.A., L.L.B (H), MB.A. B.E. B.E., MBA B.Tech., MBA

36 38 41 33

Feb 26, 1996 Mar 21, 1992 Dec 30, 2002 Jan 8, 2003

14 16 17 9

30,54,486 39,55,799 25,03,926 26,93,770

46 37 41

Aug 4, 1986 Jan 4, 2007 Apr 26, 1999

23 16 20

B.Tech. B.Sc., M.Sc.

36 48

Dec 29, 1997 Jul 2, 1997

13 27

Puneet Gupta

DM, ES SVP and Head – Pune Development Center (Phase 1) Principal Researcher, SETLabs

85,19,396 IISc, Trainee 37,00,184 Wipro Technologies, General Manager 24,99,825 Integrated Computing Environments, Manager, Software Development 25,65,791 SAIL, Faculty 75,94,737 L&T Ltd., Project Manager

B.E.

30

Mar 12, 2003

9

Purushotham Bhandarkar Purushotham K. Rabindra Kumar Sahoo Radhika Santhanakrishnan Raghavan S. Raghavendra Sai Vissa Raghu Ram K. S. Raghunath Basavanahalli Raghunath K.

Unit Operations Manager, CME Senior Manager, Systems, CCD GPM, RETL DM, Finacle Principal Architect, SaaS Senior Principal Consultant, ES DM, ES Senior Principal, EUS DM, Finacle

38 44 44 44 35 45 36 41 54

Feb 13, 1995 Mar 19, 1994 Nov 6, 2000 Jul 6, 1998 Nov 7, 1994 Nov 25, 2002 Jun 10, 1996 Mar 9, 2001 Sep 16, 1999

16 20 18 12 13 20 15 20 31

Raghupathi N. Cavale Raghuveer B. K.

AVP, India Business unit Senior Principal, Product Incubation Engineering DM, BCM Principal Consultant, Finacle DM, IVS

B.E. B.Sc., PGD B.Sc., M.E, M.Sc. B.Sc., M.Sc. B.E. B.E., M.Sc. Engg B.E. B.Sc. Engg B.Com., L.L.B, CAIIB B.E., MS B.E.

29,28,965 Bell Labs-Lucent Technologies, Senior Software Engineer 27,28,836 Kirloskar Electricals, General Engineering 26,26,632 Indian Computer Academy, Coordinator 24,86,035 TCS Ltd., Associate Consultant 28,74,634 Tata Interactive System, Manager – Instructional Design 27,74,757 Complete Business Solution, Trainee 31,92,883 Nutech Systems Inc., Principal SAP Consultant 31,14,499 Humming Bird Automat, Manager 35,60,942 HCL Technologies America Inc., Account Manager 27,35,032 Canara Bank, Manager

46 40

Dec 13, 1999 Apr 16, 1992

23 19

42,73,927 PricewaterhouseCoopers Ltd., SAP Consultant 26,58,457 Ashok Leyland Ltd., Executive – Production

B.E., B.Sc., MBA B.Sc., PGD, M.Sc. B.E.

44 49 40

Sep 20, 2004 Nov 8, 1983 Jun 30, 2005

22 24 16

33,34,945 CMH India, VP 28,25,339 — 24,56,459 Softpro Systems Ltd., Global DM

B.Com., C.A., MCOM B.Tech. B.Tech., MBA B.E.

35

Sep 9, 1997

13

30,00,238 Vishnu Bharat & Co., Auditor

33 35 36

Jun 24, 1996 Aug 16, 1999 Oct 14, 1996

12 12 15

27,33,511 — 32,40,173 Nexgen Information Solutions, Associate Consultant 24,06,604 Telco Ltd., Maintenance Engineer

Diploma, B.Tech. B.Sc., PGD

38 36

Nov 10, 1994 May 30, 1996

19 16

28,06,847 DDE, Org Systems, Senior Customer Support Engineer 26,33,550 Srg Systems (P) Ltd., Assistant Manager – Marketing

B.E. B.Tech., MS B.Sc. Engg, MBA AMIE

37 39 42 41

Dec 29, 1994 Mar 21, 1992 Apr 3, 2000 Dec 15, 1998

16 16 20 18

25,52,433 42,39,451 33,42,678 36,66,076

B.Com. (H), ICWAI, C.A. B.E. (H) B.E. B.Tech. B.Tech. B.Tech. B.Tech. B.Sc., PGD

35

Oct 11, 1999

14

47,64,897 Tata Technologies (I) Ltd., Finance Manager

38 33 37 36 33 34 33

Jun 17, 1991 Jul 20, 1998 Jun 27, 1994 Oct 8, 2001 Jun 24, 1996 Jun 26, 1995 Jun 8, 1998

18 12 14 15 12 13 10

50,47,707 28,98,800 27,85,700 31,96,573 27,72,389 25,04,853 25,94,359

B.E., M.E., MS B.E.

39 58

Dec 15, 2003 Mar 31, 1999

12 37

24,76,980 Forest Laboratories, Lead Unix Systems Administrator 61,81,474 Satyam Computer Services, Consultant

BBM, FCA

47

Jul 1, 1994

23

86,02,293 Manipal Printers and Publishers Ltd., Accountant

B.E. B.Com., ACS, CAIIB B.Sc., CAIIB B.E., M.E. B.E., M.E. B.Sc., M.Sc. B.Sc., B.Tech., MBA B.Tech. B.Sc., MCA B.E., M.Tech. B.Tech.

39 44

Dec 22, 1997 Jun 4, 1999

17 24

26,77,096 PCL Mindware, Project Lead and DBA 26,25,734 Canara Bank, Officer

51 40 43 46 47 36 39 39 34

Sep 4, 1996 Sep 4, 1992 May 3, 2000 Jun 5, 2002 Mar 20, 2002 May 8, 1995 Oct 21, 1991 Mar 5, 1996 Oct 14, 1996

30 17 22 24 24 15 16 17 12

44,34,101 30,34,825 29,86,823 30,26,130 34,01,904 27,44,699 28,41,981 29,07,858 28,19,637

Pravin Rao U. B. Pravin Vyanktesh Kulkarni Pret Joseph Prince Thomas Priti Jay Rao

Rajaram Venkataraman Rajasekaran K. S. Rajasekhar Veeramachaneni Rajashekara V. Maiya

Product Manager, Finacle

Rajeev Rajagopalan Rajeev Ranjan Rajendra D. Kokate

DM, BCM DM, ES Principal Architect, NMS

Rajendra Kumar K. L. Rajendra Prasad P. V.

Solution Architect, Finacle Solutions & Alliances Manager, Finacle Principal Architect, SETLabs AVP, ES Divisional Manager, BCM PR, Principal Technical Consultant, SI VP, Finance

Rajesh Balakrishnan Rajesh Rao A. Rajeswar Rao K. Rajinder K. Gandotra Rajiv Bansal Rajiv Raghu Rajkumar R. Rajneesh Malviya Rajnish Sharma Rakesh Kumar Mishra Raktim Singh Ram Kalyan Kumar Medury Rama Murthy Prabhala Rama N. S.

AVP, BCM Principal Architect, CCD DM, IVS Divisional Manager, NMS Senior Principal Consultant, ES DM, Finacle GPM, IHL

Ramakrishna K. P. Ramakrishnan K. R.

DM, IMS VP and Head, Bangalore Development Center SVP and Head, Commercial and Facilities, Infrastructure and Security DM, EUS Group Test Manager, Finacle

Ramakrishnan M. Ramamurthy P. Ramana Venkata Udathu Ramanarayanan S. Ramarathinam Sellaratnam Rambabu Pallavalli Rambabu Sampangi Kaipa Ramesh Adiga Ramesh Amancharla

AVP, Quality Practice Manager, Finacle Unit Operations Manager, Finacle DM, MFG Principal Solutions Manager, SI DM, CME DM, RETL DM, PE DM, BCM

Ramadas Kamath U.

Previous Employment – Designation

CMC Ltd., Assistant IT Engineer — — Tata Unisys Ltd., Education Centre, Faculty Wipro Net, Senior Network Engineer National Mineral Development Corp., Developer Aruna Software Technology, Systems Software RS Software India Ltd., Business Manager Hewitt Associates, Consultant

Motorola, Software Engineer — IIS Infotech, Associate Consultant Microland Ltd., Consultant

Continental Device, Trainee Crompton Greaves Ltd., Network Engineer — Poorva Consultants, PM — — —

Canara Bank, Officer National Infomatics, System Analyst Temenos Systems India (P) Ltd., Associate PM Eclaton Ebusiness Development Unit, CTO Synova Inc., PM L&T Ltd., Trainee — Insat, Mcf (ISRO), Engineer SAIL, Trainee

Infosys Annual Report 2007-08

| 35

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Ramesh Babu S. Ramesh Chandra Revuru Ramesh G. Ramesh Srinivasan Ramgopal Natarajan Rangan Varadan

AVP, E&R GPM, ES GPM, IS Principal, Consulting Solutions DM, ES AVP, Consulting Solutions

39 34 35 44 34 42

Jul 23, 1997 Oct 23, 2006 Jun 24, 1996 Apr 24, 2006 Jan 29, 2007 May 13, 1999

12 12 12 20 13 19

Ranganath Dwarakanath Mavinakere Ranju Philip A. Ravi Kiran Ravi Kumar S. Ravi Prakash Gorthi

VP and Head, Consulting Solutions DM, PE AVP, SI AVP, ES PR, Principal Researcher, SETLabs

B.E., M.Tech., Ph.D B.E., MBA B.Sc., MCA B.E., MS, MBA B.E. B.Com., MS, Graduate CWA, Ph.D B.E., PGD, M.Tech.

45

Dec 4, 2000

20

59,15,023 Surya Software Systems Pvt. Ltd., Director

38 44 36 53

Nov 7, 1994 Feb 15, 1996 Nov 8, 2002 Feb 23, 2004

16 21 15 29

28,42,719 44,70,368 56,55,813 29,32,020

TVS Electronics, Deputy Engineer ABB Ltd., Senior Engineer – Marketing Sapient Corporation, Director Component Insights Pvt. Ltd., VP (Intelligent Systems)

Ravi Vasudeva Ravichandran Annadurai Ravindra Karanam Ravindranath P. Hirolikar

37 40 38 35

Jul 20, 1998 Mar 14, 2003 Nov 7, 1994 Nov 5, 1997

15 18 18 13

28,19,561 28,59,712 30,15,945 28,45,516

Hindustan Lever Ltd., Manager Wipro Ltd., Regional Manager Bajaj Auto Ltd., Manager Global Telecom Services Ltd., Network Engineer

Ravishankar Ganesan

Principal Consultant, ES DM, IMS DM, NMS Senior Manager, Information Security Assurance, Security Audit & Architecture Group Senior Manager, Quality

B.Tech. B.E. B.E., PGD B.Tech., M.Tech., Ph.D B.E., PGD B.E. B.E., ICWA B.E.

B.E., PGD

41

Nov 4, 2004

20

Ravishankar Shetty

GPM, IHL

B.E.

32

Nov 18, 1996

11

24,42,594 GE Capital International Services, Senior Principal Consultant 26,14,109 —

Ravishankar Subramanyam Hossur Renganathan V. R. Richa Govil Richard Lobo

Principal Consultant, ES

B.E., PGD

38

Aug 26, 2002

14

24,01,719 Siemens IS Ltd., Consultant

AVP, India Business unit AVP, Corporate Planning Manager, Employee Relations, HRD DM, PE Divisional Manager, PLES DM, SI DM, CME GPM, ES DM, IHL

B.E. B.A., Ph.D B.E., PGD

38 36 36

Jun 18, 1990 Jul 12, 2004 Dec 11, 2000

18 19 13

44,98,765 — 37,29,195 Bain & Co., Team Leader 30,39,136 Godrej & Boyce Mfg. Company, Assistant Manager

B.E. B.Tech., PGD B.E. B.E., M.Tech. B.Tech. B.E.

35 36 38 39 38 36

Aug 28, 1995 Nov 30, 2006 Jan 4, 2007 Jul 19, 1999 Sep 20, 2004 May 22, 2000

13 12 17 15 14 14

27,41,709 31,66,924 31,02,086 30,07,959 25,73,480 24,92,448

L&T Ltd., Trainee Sierra Atlantic, VP – Enterprise Applications Intel Technology India Pvt. Ltd., SPM Mahindra British Telecom Ltd., PL Polaris Software Lab Ltd., Project Director Tata Elxsi Ltd., Specialist

B.E., M.Tech. B.E. B.Sc., MCA B.E., Ph.D B.Tech.

44 36 41 56 36

Jan 22, 2001 Dec 29, 1997 Jun 6, 2005 Feb 3, 2005 Aug 5, 2002

21 14 19 35 15

26,19,542 29,40,165 29,27,143 31,10,135 31,17,679

Softpro Systems Pvt. Ltd., Senior Consultant L&T Ltd., Mechanical Engineering Cognizant Technology Solutions, PM TCS Ltd., Subpractice Head – Engineering Analysis TCS Ltd., Associate Consultant

Samson David Samuel Mani Kallupurakal

DM, ES DM, MFG DM, IHL Group Technical Consultant, PLES DM, BCM & Head, Chandigarh Development Center VP, CME Deputy Head, Legal, Finance

39 33

Mar 15, 1992 Dec 30, 2002

18 8

60,65,943 Voltas Ltd., Service Engineer 31,24,362 Reliance Industries Ltd., Legal Advisor

Sanat Rao

VP, Finacle

B.E. B.A., L.L.B (H), LLM B.Com., PGD

43

Dec 20, 1999

17

Sandeep Kumar

Senior Principal, Consulting Solutions Principal Architect, SETLabs DM, IHL (Sales)

B.E., PGD

37

Mar 28, 2000

13

44,06,876 Citicorp Information Technology Ltd., Consultant – Data Warehousing Unit 31,54,684 TCS Ltd., IT Analyst

B.E., M.E. B.Tech., PGD

39 33

Feb 1, 1992 Jan 7, 2000

17 11

DM, RETL VP, MFG (Sales) VP, Corporate Planning AVP, PE DM, ES Principal Architect, SI Group Manager, E&R AVP, E&R DM, Finacle GPM, BCM DM, BCM DM, BCM AVP, BCM DM, ES SVP and Head, Quality Principal Architect, NMS General Manager, Research, SETLabs DM & DC Head, RETL Principal Consultant, SI AVP and Head, Corporate Accounting Group AVP, MFG & Head, Mysore Development Center

B.E., MBA M.Sc. (Tech) B.E. B.E., PGD B.Sc., MCA B.Tech. B.Tech., M.Tech. B.E. B.E. B.Sc. B.E. B.E. B.E. B.Tech. B.Sc. (H), M.Sc. B.E. B.Sc., MCA

38 39 41 50 34 39 40 37 35 43 36 34 36 37 55 36 38

Jan 27, 1998 Dec 15, 2000 Dec 27, 2000 Feb 12, 1998 Jun 5, 2000 Jan 6, 1997 Dec 16, 1997 May 10, 1993 Nov 7, 1994 Sep 12, 2005 Feb 13, 1995 Aug 28, 1995 May 2, 1994 Feb 13, 1995 Sep 27, 2000 Jan 27, 1998 Jun 23, 1992

15 18 18 27 11 17 16 15 13 22 13 13 14 14 32 15 16

27,72,327 IIT Madras, Associate 27,43,897 Infosys Technologies Ltd., Senior Officer – Corporate Planning 29,38,777 Sprint RPG India, Executive 51,04,844 Gemplus India Pvt. Ltd., Director 58,62,520 Tata Quality Management Services, Senior Consultant 35,53,927 C-Dot, Divisional Manager 28,44,654 Metamor Global Solutions Inc., Software Engineer 31,76,296 ITI Ltd., Manager 24,49,082 Bapatla Engineering College, Lecturer 37,53,951 — 24,34,796 — 25,53,058 Kpit Cummins Infosystems Ltd., Senior Manager 30,73,560 — 27,46,071 — 44,42,510 — 26,16,623 Sail, Trainee 84,64,999 IMR Global, VP 25,93,310 Voltas Ltd., Engineer 27,41,090 —

B.E. B.E. Diploma, B.Com., A.C.S., M.Com. B.Tech.

36 35 34

Jun 25, 2001 Jul 9, 2001 Jun 29, 1998

16 15 13

34,02,566 Cosmonet Solutions Pvt. Ltd., Director 28,65,125 Satyam Infoway Ltd., Associate Consultant 38,72,155 IFCI, Manager

38

Jun 22, 1992

16

52,74,833 Mukand Ltd., Bombay

Rohit P. Roshan Kumar Subudhi Ruchali Ganesha Dodderi Sachidanand Singh Sachin Ashok Pandhare Sachin Kumar Devalapurkar Sailaja Chintalagiri Saket Singh Sakthivel Venugopal Sambasiva Rao Maddali Sameer Goel

Sandeep M. K. Sandeep Raju Sandeep S. Choudhari Sanjay Jalona Sanjay Purohit Sanjeev V. R. Sankar Venkata Konduru Santhosh A. Sarma K. V. R. S. Satheesha B. N. Sathish Kumar G. Satish Balkrishna Marulkar Satish G. Satish Grampurohit Satish H. C. Satya Prakash Singh Satyendra Kumar Savio Anthony Coutinho Savio D’Souza Senthil Kumar Nallasamy Senthil Rajan Alaguvel Shailesh Kumar Agrawal Shaji Mathew

36 |

Power of talent

Gross remuneration (Rs.) 31,74,732 25,96,671 31,44,927 30,47,692 29,35,469 48,92,451

Previous Employment – Designation

TCS Ltd., Trainee Computer Associates, Senior Manager — UGS, Program Manager Wipro Technologies, DM Lehigh University, Assistant Professor

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Sharmistha Adhya Shashidhar B. Ramakrishnaiah Sheela Shenoy

DM, HRD DM, BCM

B.Tech. (H) B.E.

35 37

Jun 26, 1995 Feb 14, 2001

13 15

GPM, Finacle

41

Jan 7, 2000

22

Shekar S. R. Shekhar S. Potnis

Group Manager, UET, Finacle AVP, BCM

52 40

Jul 1, 1999 Nov 1, 1996

33 16

27,35,030 Infosys Technologies Ltd., Consultant 37,71,677 Thermax Systems & Software, Executive

Sheppard B. Lyngdoh Shibulal S. D. Shishank Gupta Shiv Shankar N.

GPM, BCM COO and Director DM, IVS AVP and Head, Chennai (Sholinganallur) Development Center GPM, IHL

Diploma, B.Com., CAIIB B.Com., CAIIB B.E., MBA-OR, MBA-FM B.Tech., PGD B.Sc., M.Sc., MS B.E. B.Tech.

39 53 32 46

Dec 1, 1997 Sep 1, 1981 Jan 6, 1997 Aug 4, 1999

16 32 11 26

27,79,188 78,34,146 26,40,895 67,79,072

Shobha N. Rao

Gross Previous Employment – Designation remuneration (Rs.) 29,64,315 — 26,86,052 Mediaserv Information Architects Inc., Senior Solutions Consultant 25,95,758 ICICI Ltd., Senior Officer

TCS Ltd., Senior Systems Analyst Sun Microsystems, Senior IR Manager — PRT, Senior Manager

B.E.

32

Mar 24, 1997

11

27,18,559 —

B.Com., C.A, CFA

35

Jul 31, 2000

13

Shree Priya Garg Shrinivas Udatha Shubha V. Shyam Sundar V. Siddharth Awasthi

General Manager, Infrastructure, Facilities Principal Consultant, ES DM, ES AVP, IHL AVP, CCD Business Manager, BCM

B.Tech., PGD B.Tech., PGD B.E. B.E. B.Tech.

35 41 48 40 35

Jun 8, 1998 Nov 29, 1999 Aug 2, 2000 Dec 19, 1994 May 8, 1995

13 19 27 19 14

Sitangshu Supakar Sitaram M. L.

GPM, BCM AVP, CCD

B.E., M.Tech. B.E.

37 51

Jun 24, 1996 Jan 24, 2000

12 28

Sivakumar Ekambaram Sivashankar J. Somakumar Kolathur Somnath Baishya

B.E. B.Tech., MMS B.Tech., M.Tech.

38 48 39

Mar 29, 2002 Jan 22, 1999 Feb 15, 1993

18 24 15

B.Tech. (H), PGD

34

Apr 19, 1999

11

29,84,448 TELCO, Senior Officer

Diploma, B.E.

45

Sep 7, 2000

21

34,26,962 Standard Chartered Bank, Service DM

B.Tech. B.Tech., MBA B.Tech., M.Tech.

42 39 39

Jul 10, 2000 Jul 29, 2002 Apr 2, 2001

20 17 18

42,48,474 The New India Assurance Co. Ltd., Admin. Officer 24,88,682 Satyam Computer Services Ltd., Senior Consultant 35,77,802 Wipro Technologies, Consultant

B.Sc. B.Com., PGD B.E., M.Tech. B.Sc., M.Sc.

37 41 39 51

Dec 18, 1995 Aug 26, 1996 Apr 17, 2000 Jan 1, 1984

15 21 16 24

25,40,681 45,17,786 25,90,990 26,06,736

B.E. B.E., M.E.

45 53

Dec 7, 2000 Jun 15, 1992

23 30

Srinidhi K. V. Srinivas Kamadi Srinivas Padmanabhuni

DM, IHL VP and Head, IS AVP, SI Manager,Global Entry Level Recruitment and Campus Relations, HRD Divisional Manager, India Business unit AVP, Consulting Solutions DM, ES AVP, Software Engineering and Technology Labs DM, BCM VP and Head, CDG GPM, PLESs Head, Audits and Assessments, Quality VP and Head, E&R Director and Head-Delivery Excellence Group Manager, UET, Finacle DM, ES Principal Researcher, SETLabs

27,78,444 Jardine Lloyd Thompson Insurance Consultants Ltd., Corporate Finance Manager cum Co. Secretary 27,27,187 TISCO, Senior Officer 33,30,986 TCS Ltd., IT Analyst 33,93,595 Bosch, Senior PM 34,68,828 Monotype India Ltd., Customer Relations 27,86,746 Integra Microsystems Pvt. Ltd., Software Engineer Trainee 26,21,585 — 27,68,453 Network Solutions Pvt. Ltd., General Manager, Facility Management Services 28,55,679 Polaris Software Ltd., Assistant VP 61,21,833 Anuvin Business Solutions, Director 39,57,336 —

43 35 38

May 21, 1998 Nov 29, 2002 Apr 22, 2002

23 12 9

Srinivas Prabhala Srinivas Uppaluri

DM, BCM VP, Corporate Marketing

BBM B.E. B.Tech., M.Tech., Ph.D B.E., MS B.Sc., C.A.

39 45

Dec 18, 2006 Aug 21, 2002

17 23

Srinivasa Rao Makkapati

GPM, PE

B.E., M.Tech.

39

Dec 6, 2000

17

Srinivasa Rao Patnala Srinivasan Govindan Srinivasan Padmanabhan Srinivasan Raghavan Srinivasulu Mallampooty Sriram Natarajan Sriram Ranganathan

B.Tech., M.E. B.E. B.E. B.E. B.E. B.Tech. B.E.

41 40 40 49 37 34 36

Jul 16, 1998 Nov 12, 1998 Jul 4, 2005 Jun 23, 2000 Oct 8, 2001 Jun 26, 1995 Dec 9, 1996

18 17 18 28 15 13 13

Sriranga Ramanuj Acharya K. N. Srivathsan S. Subhash Chandra Rastogi

DM, PLES DM, BCM DM, BCM AVP, NMS AVP, Corporate DM, RETL GPM, Energy, Utilities and Services University Head, PLES, PLES

B.E., M.Tech.

43

Feb 27, 2006

22

Principal, Consulting Solutions AVP, ES

37 59

Oct 9, 2006 Dec 19, 2005

15 34

Subrahmanya S. V.

VP, E&R

B.E. B.Tech., M.Tech., Ph.D B.E., M.Tech.

46

Oct 8, 1996

20

Subramanyam G. V. Subrata Kar Subraya B. M.

VP and Head, SETLabs DM, ES AVP, E&R

41 44 53

Jun 15, 1988 Nov 21, 2005 Dec 1, 2000

20 21 29

Suchithra Ramachandra Prabhu

AVP, IS

B.E. B.Sc. B.Sc., PGD, M.Sc., Ph.D B.E.

43,20,450 Ashok Leyland Information Technology Ltd., Assistant PM 67,39,356 — 32,92,592 Hexware Technologies Ltd., AVP 38,71,232 Infosys Technologies Ltd., Consultant – E&R

37

Mar 15, 2007

15

32,00,895 IBM Global Service, General Manager

Shobhit Agarwal K.

Soundararajan Sarangarajan Sreedhara Rama Warrier Sreekumar Sreedharan Sreekumar Sukumaran Sreenivasa R. Kashyap Sridhar M. Sridhar Srinivasan Chari Sridhara N. R. Srikantan Moorthy Srinath Batni

Integra Microsystems, Technical Writer PCL, Mindware, PL NIIT Ltd., Group Consultant EDC —

64,18,854 Inventa Corporation, General Manager 1,26,54,419 PSI Bull (I) Ltd., Senior Manager – Marketing Technical Support 25,92,102 State Bank of Mysore, Manager 26,15,432 Mascot Systems Ltd., PM (Lead Consultant) 31,91,834 Firewhite Inc., Software Architect 32,67,298 Deloitte, VP 50,65,391 Andersen Business Consulting, Director – Business Consulting 24,47,576 Hitachi Micro Systems Asis Ltd., Assistant Design Manager 30,68,105 DRDL, Scientist 26,56,762 ITC, Systems Administrator 26,89,374 Powersoft Consulting Pvt. Ltd., Technical Director 39,57,483 Tata Infotech Ltd., Group Manager 41,65,545 Majoris Systems Pvt. Ltd., PM 29,04,303 — 25,62,691 MICO, Superintendent 28,69,597 Honeywell Technology Solutions Lab Pvt. Ltd., Learning Lead 25,20,917 Covansys India Pvt. Ltd., Consultant 37,75,345 Satyam Computer Services Ltd., AVP

Infosys Annual Report 2007-08

| 37

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Sudheer H. R. Sudhir Albuquerque

DM, Finacle VP, Energy, Utilities and Services & Head, Mangalore Development Center AVP, IMS

B.E. B.E.

34 39

Feb 29, 1996 Oct 1, 1990

14 18

B.E.

38

Jul 29, 2002

17

B.Sc., PGD B.Sc., PGD B.E., PGD B.Tech., M.Tech. B.Com., MBA

41 40 44 36 33

Feb 21, 1995 Apr 30, 1999 Dec 12, 2001 Feb 7, 1994 May 6, 2004

21 15 21 14 12

Sundar Raman K. Sundaresh Shankaran Sundaresh Shenoey Sunil Jose Sunil Prabhu B. Sunil Senan Sunil Talloo

DM, Finacle Group HR Manager, HRD VP, IHL DM, RETL Group Manager, Marketing, Finacle DM, RETL GPM, PLES DM, MS Solutions Practice Divisional Manager, PE GPM, India Business unit Practice Manager, ES DM, IMS

32,82,625 HCL Comnet Ltd., Founder Member and Regional Manager 25,44,290 First Computer, Corporate Manager – Operations 24,96,451 Freelance Consultant for HR 44,81,208 R.S. Software India Ltd., VP 27,66,714 — 28,87,138 Polaris Software Lab Ltd., AVP Marketing

48 38 44 39 39 35 41

Jan 22, 1996 Mar 9, 1998 Aug 30, 2004 Jun 8, 1994 Mar 21, 1992 Jan 8, 2001 Jan 11, 2001

26 17 21 17 17 13 16

29,96,270 28,78,518 31,55,410 30,75,249 26,98,255 35,45,916 28,63,271

Indian Organic Chemicals Ltd., Manager L&T Ltd., Production Incharge Accentures Services Pvt. Ltd., Senior Manager Motor Indus. S/W Services Pvt. Ltd., Supervisor Agro Pvt. Ltd., Systems Software TCS Ltd., IT Analyst Cambridge Technology Partners, Associate Director

Surendra S. Suresh J. K. Suresh Kamath K. Suresh N. R. Suresh Raghuraman

DM, Energy, Utilities and Services AVP, E&R General Manager, CAG, Finance DM, Finacle DM, CME

B.Tech. B.E. B.Tech., M.Tech. B.Tech. B.E. B.E. B.Sc. (H), MBM, MCA Diploma, B.E. B.Tech., MS, Ph.D B.Com. B.E., MS B.Sc., MCA

39 48 46 34 45

May 8, 1996 Jul 27, 1998 Nov 26, 1987 Nov 27, 1995 Apr 23, 2001

17 25 20 12 21

26,35,556 38,25,840 26,50,602 24,09,486 29,91,884

Suresh Rao Surya Prakash K. Surya Prakash Thammiraju Suryanarayanan M. S.

DM, PE VP, MFG DM, BCM GPM, IVS

B.E. B.E. B.Tech., M.Tech. B.Sc., MCA

40 39 36 35

Jun 25, 1997 Jul 23, 1990 Jun 3, 2002 Aug 2, 1999

17 18 13 12

27,01,425 60,93,377 26,48,011 27,17,967

Suryanarayanan Sankaranarayanan Sushanth Michael Tharappan Sushil Kumar Suvro Banerjee Swaminathan R. Tapan Chandra Munshi Tapas Mishra Tarang S. Puranik Tarunpreet Singh Ahluwalia Thirumala Arohi Thirumaleshwara Bhat D. Thothathri Visvanathan

Product Manager, SETLabs

B.E. (H)

47

Sep 22, 2005

25

32,63,721

BHEL, Engineer ADA, Deputy Project Director — — Complete Business Solutions Inc., Senior Technical Manager Accatel Modi N/W Sys, Senior Engineer – Testing — Espace, Senior Solutions Architect Aviation Software Development Consultancy (I) Ltd., Systems Engineer Global Automation Inc., Director of Customer Solutions

AVP, ILI

B.Sc., MBA

33

Apr 3, 2000

11

34,15,003 Life Skills India Training Pvt. Ltd., Manager

GPM, NMS DM, MFG GPM, IMS DM, Finacle DM, IHL DM, ES DM, CME

B.E., PGD B.E., MS B.E. B.E., M.E. B.Sc., MCA B.E. B.Tech.

33 43 37 42 36 36 38

Jun 26, 1995 Oct 15, 1998 Jun 22, 1992 Dec 1, 1993 Feb 11, 2002 May 14, 1999 Jun 26, 2000

13 20 16 17 14 15 16

24,29,952 32,57,152 26,58,697 28,13,685 26,26,911 32,30,004 26,99,972

B.Tech. B.Sc., CAIIB, M.Sc. B.E.

35 53 45

Aug 25, 1997 Aug 2, 1999 Jul 6, 2000

13 31 22

25,60,624 K.T.P.S, General Engineering 30,06,118 Infosys Technologies Ltd., Consultant 52,40,597 CSAI, Senior Consultant

Tomy Thomas

DM, BCM Head, Testing, Finacle AVP, RETL & Head, Chennai (Mahindra City) Development Center DM, PE

48

Jul 5, 2000

21

24,34,132 ISL Ltd., Senior Addl. Manager

Tushar Kirti Sachdev Uday Bhaskarwar Umasree Govindarajan Usha Prabhakara Shastry Vaijayanti A. Patharkar

Principal Architect, SI VP, India Business Unit (Sales) GPM, SSDD Delivery DM, Finacle DM, BCM

35 37 37 40 40

Nov 6, 2000 Jun 22, 1992 Mar 6, 2006 Dec 5, 2001 Jul 1, 1996

12 16 16 18 17

26,49,931 41,46,723 25,09,205 25,44,358 26,16,649

Valmeekanathan Subramanian Varsha Bharat Verma Vasudev Kamath Venkat Narayan S. Venkata Ramana Reddy Gunna Venkata Seshu Gulibhi

VP, PLES

B.Sc., B.Tech., M.Tech. B.E. B.Tech. B.Sc., M.Sc. B.Sc., M.Sc. Diploma, B.Sc., MCM B.E. (H)

43

Dec 12, 2005

23

71,53,229 Freelance Consulting, Independent

DM, RETL DM, MFG Principal Architect, SI Group Lead, Corporate Planning

B.Sc. B.Tech. B.E. B.Tech., MBA

42 34 35 39

Sep 28, 2001 Feb 5, 1996 Jun 27, 1994 Sep 5, 2005

22 12 14 15

27,00,462 28,26,377 24,86,585 24,53,721

DM, MFG

40

Feb 21, 1994

16

32,54,674 UB Info.& Consulting Services, Executive

44

Jul 8, 1998

24

25,19,558 S.N. Finance Ltd., Manager

Sudhir Balakrishnan Nair Sudir Babu N. P. Suma Subramanian Suman Sasmal Sumesan Kala Sumit Virmani

Gross Previous Employment – Designation remuneration (Rs.) 30,51,153 Telco Ltd., Trainee 56,52,252 —

— Tcg Software Services Pvt. Ltd., Managing Consultant — Uptron India Ltd., Executive Officer TCS Ltd., Assistant Consultant TCS Ltd., IT Analyst Punjab Communications Ltd., Deputy Manager

Mastek Ltd., Project Analyst — Hexaware Technologies Ltd., Senior Consultant Sonata Software Ltd., PM Patni Computer Services, Developer

Infosys Technologies Ltd., Consultant — — Reliance Infocomm, L2

Venkata Subramaniyam V. V. Venkatachalam P. K. Venkataramanan T. S. Venkatesh Chandrasekaran Vilapakam Venkatesh Gadiyar H. Venkatraman G. Venkatramana Gosavi

General Manager, CAG, Finance

B.Sc., M.Tech., M.Sc. B.Com.

DM, BCM VP, Finacle DM, IVS

B.E. B.E. B.Sc., M.E.

36 43 40

Aug 23, 1993 Nov 29, 1993 Jun 2, 2003

15 22 16

29,50,949 — 46,22,770 Telco Ltd., Senior Systems Officer 33,02,425 Inautix Tech., Assistant VP

General Manager, Finance DM, PE AVP, Finacle

B.Com., ACA. B.E. B.E., MBA

40 35 44

Jan 20, 1997 Jun 29, 1994 Apr 3, 2002

16 14 19

Verender Kumar

Senior Principal, Consulting Solutions

B.E.

39

Aug 9, 1999

19

29,26,135 Manipal Printer and Publishers Ltd., Accounts Officer 25,92,576 — 35,95,322 Ramco Systems, Country Manager – India & Middle East 24,33,872 IBM Global Services, PM

38 |

Power of talent

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Vibhuti Kumar Dubey

DM, ES & Head – Pune Development Center (Phase 2) Principal Architect, Products, Finacle GPM, PLES Product Manager, Finacle

B.E., PGD

43

Apr 1, 2002

19

B.E.

40

Apr 21, 1997

18

28,97,896 Merit Systems Pvt. Ltd., Consultant

B.E., M.E. B.Sc., CAIIB, M.Sc., PGD B.E., PGD

40 54

Dec 3, 2001 Sep 1, 1999

16 31

26,25,920 Wavelet Technologies Pvt. Ltd., Director (R&D) 26,70,779 Vysya Bank, Senior Manager

36

May 13, 1998

12

24,94,692 Infosys Technologies Ltd., Developer

B.E. B.E., PGD B.E. B.Tech. B.Com., C.A. B.E. B.E., MBA B.E., M.Tech. B.Sc., MBA, M.S.

34 35 34 41 37 35 36 42 41

Feb 26, 1996 Oct 21, 2002 Oct 13, 1997 Aug 2, 1993 Apr 3, 1995 Mar 5, 2007 Jan 6, 1997 Dec 29, 1997 Jan 13, 2005

12 13 13 19 16 15 13 19 20

38,05,661 28,74,752 24,39,723 28,10,403 49,74,898 27,92,892 25,23,573 26,81,049 28,67,670

— HCL Comnet Ltd., Regional Manager Siemens, Executive Contech (I) Pvt. Ltd, Developer Sajawat Industries Ltd., Chief Accountant Wipro Technologies, Technical Manager Atlaz Technology Pvt., Executive C-Dot, General Engineering Hexaware Technologies Ltd., Assistant VP

B.E. B.E. (H), ICWA B.E. B.Tech.

39 41 35 39

Apr 4, 1992 Dec 26, 2002 Jun 26, 1995 Jul 1, 1991

16 21 13 17

34,81,774 26,24,196 26,52,088 27,68,164

— Ramco Systems Ltd., Senior PM — —

37 44

Dec 26, 2000 May 2, 1994

17 17

25,51,621 Techspan India Ltd., DC – Manager 25,76,467 HMT Ltd., Engineer (CIM)

DM, REU

B.Tech. B.Tech., M.Tech., Ph.D B.E.

34

Sep 3, 2001

12

Group Manager, E&R

B.Arch, PGD, Ph.D

40

Jul 22, 1998

13

27,10,218 Hexaware Technologies Ltd., Consultant & Systems Analyst 26,35,951 Nirma Institute of Management, Professor

Vidya Shankar M. Vidyabhushana Hande Vijaya Raghavan T. R. Vijayaraghavan T. S. Vijayasimha A. J. Vikas Gupta Vikram Meghal Vinay Rao Vinayak Pai V. Vinayak Prabhakar Hegde Vinayak Shankar Jadhav Vishwanath G. N. Visvanathan Lakshmi Narayan Visveswara Gupta K. Viswanatha Gopal K. S. Visweswar B. K. Vivek Vivek Gupta Vivekanand P. Kochikar Yegnaswamy Yegnanarayanan Yogesh Kumar Bhatt

Group Manager, Go-to-Market, Corporate Marketing DM, BCM Regional Manager, Finacle Principal Architect, PE Group Lead, Corporate Planning VP, Finance DM, IVS GPM, RETL DM, MFG DM, CME AVP, REU DM, CME DM, BCM Senior Principal, Consulting Solutions DM, PE AVP, E&R

Gross Previous Employment – Designation remuneration (Rs.) 32,86,001 HCL Group, Business Development Manager

Employed for part of the year with an average salary above Rs. 2 lakh per month Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Gross Previous Employment – Designation remuneration (Rs.)

Ajay Kumar Bohra

Product Manager, Finacle

B.E., MBA

40

Feb 13, 2001

13

3,63,677

Ajay Sood

GPM, IS

B.Tech., MBA

37

Oct 13, 1997

13

13,53,544

HSBC Ltd., Relationship Manager UTI, Deputy Manager

Ajeet Singh Jain

Senior PM, EUS

B.Tech.

34

Aug 14, 2006

10

2,21,142

Amit Singh

GPM, EUS

B.E., PGD

36

Mar 16, 1998

13

27,29,468

Infosys Technologies Ltd., Senior Systems Analyst

A.D.P. Pvt. Ltd., Senior PL

Anand Ganapathy Chennira

Group Manager, Go-to-Market, ES

B.E., PGD

35

Oct 12, 1998

11

12,30,229

Asian Paints, Executive

Anil Sarin

Product Manager, Product Incubation Engineering

B.Sc. (H), M.Sc.

49

Aug 23, 2007

26

20,63,626

IBM India Pvt. Ltd., Engineering Manager

Aniruddha Gopal Rahalkar

Senior PM, BCM

B.E.

37

Dec 18, 2000

15

2,43,721

IIS Infotech Ltd., Assistant Consultant

Aniruddha N. Gharat

GPM, Finacle

B.E.

35

Jun 10, 1996

13

4,23,060

Jay Computers & Software (P) Ltd., Customer Support Engineer

Anuradha Amudalapalli

DM, IVS

B.Tech.

38

Apr 2, 2007

16

29,89,146

Fss, Director - Engineering

Ardhendu Sekhar Das

Divisional Manager & DC Head, EUS

B.E.

42

Jan 23, 1998

20

19,67,716

Fujitsu Network Communications Inc., Database Administrator

Arun Kumar Mahapatra

DM, ES

BA, LLB, PGD

43

Sept 10, 2007

23

16,42,444

Ashok Kacker

Principal Consultant, ILI

B.Tech., MBA

60

Jan 24, 2005

38

5,75,738

Ashwini Abhijit Kuber

GPM, MFG

BCS, MCM

38

Jan 31, 2005

16

7,53,765

Avinash Garg

GPM, IMS

B.E., PGD

36

May 21, 2007

15

22,14,584

Babuji S.

AVP, PE

Diploma, B.E.

58

Dec 17, 1997

35

9,08,632

Balaji Ramachandran

Principal, Consulting Solutions

MBBS

42

Jul 26, 2007

17

17,19,372

HCL Tech Ltd., Deputy General Manager Success Dynamics (Own Business), Director K. P. I. T Cummins Infosystems Ltd., Senior Manager Computer Sciences Corporation India Pvt. Ltd., Senior Manager – GIS Mahindra British Telecom Ltd., Chief Manager Sentient Health Pvt. Ltd., Consultant

Bhashyam M. R.

AVP, Quality

B.E., M.E.

57

Jul 7, 1995

33

3,22,376

ADA, Assistant Project Director

Bhuwan Singh Atri

Senior Associate, SSDD

B.Tech., PGD

32

May 9, 2005

7

2,15,486

Evalueserve Pvt. Ltd., Assistant VP

Bikramjit Maitra

SVP, HRD

B.Sc., B.Tech.

53

Feb 22, 1999

28

55,30,397

R. S. Software, VP

Cheriyan M. Thampy

DM, PE

B.Tech.

38

May 8, 1995

15

4,56,470

Chetan Dinesh Gaglani

DM, IMS

B.E., M.S.

40

May 28, 2007

16

24,20,915

Unisys, Program Manager & Lead Architect

BHEL, Electronic Engineer

Deepak Natraj Ramamurthi

VP, Finance

B.Com. (H), CA

42

Jul 10, 2000

18

45,16,344

Ernst & Young, Head - Assurance Services, Chennai

Deepak Sinha

VP, CCD

B.Sc. (H)

60

Apr 6, 1998

38

38,60,756

Deependra Moitra

AVP, SETLabs

B.Tech.

38

Dec 12, 2002

15

4,58,533

India Air Force, Head

Devapriyo Ghose

Principal Consultant, ILI

B.A., M.A., MBA

49

Oct 7, 2002

25

7,24,309 ICFAI Business School, Faculty Member

Bell Labs, General Manager

Infosys Annual Report 2007-08

| 39

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Gross Previous Employment – Designation remuneration (Rs.)

Digambar Sudhakar Patil

Group Test Manager, IVS

B.E., M.Tech.

44

Apr 2, 2007

22

21,40,807

P.T.C Software India Pvt. Ltd., Group Manager

Dinesh Narayan

GPM, IS

B.E., MS

39

Sept 10, 2007

15

15,43,849

United Airlines, Senior Manager

Fijoe Joseph Mathew

DM, IVS

B.E.

36

Sept 20, 2007

15

13,58,384

IBM India Pvt. Ltd., Senior Delivery Program Manager

Ganesh Rajamani

DM, BCM

B.E.

39

Apr 28, 1997

17

18,58,739

Parag Computers, Developer

Gaurav Gupta

GPM, APAC

B.Tech.

38

Jul 1, 1993

14

2,38,410

—

Girish Vasant Vaidya

DM, CME

Diploma, B.E.

44

Jul 16, 2007

20

21,57,601

Adea Solutions, Director, Delivery

Gopal Devanahalli

VP, Corporate Planning

PGD, M.Sc. (Tech)

40

Oct 1, 1999

16

21,54,879

Ford Credit Kotak Mahindra Ltd., Regional Manager

Hitesh Vrajlal Shah

Principal Architect, E&R

B.E., M.S.

45

Nov 11, 2002

22

21,68,296

Union Bank of Switzerland, Divisional VP

Jagdish Krishna Vasishtha

AVP, CME

B.E.

37

Apr 17, 1997

16

21,07,795

AT&T, Senior Engineer

Janardhan Hulikal Narayana

PM, SETLabs

B.E.

39

Feb 3, 2003

14

2,53,898

Jayesh Dhanvantkumar Sanghrajka

General Manager, Finance

B.Com., ICWA, CA

34

Jul 17, 2000

10

13,06,232

Jothiganesh Nagarajan

GPM, IMS

Diploma

36

Apr 28, 2003

15

14,01,074

Kartik C. Krishnamurti

DM, MFG

B.E.

31

Jul 19, 2007

10

2,70,162

Mascot Systems, PM KPMG, Assistant Manager Wipro Infotech, Technical Specialist ANZ Information Technology, Portfolio Manager

Krishna Kumar P.

Principal Architect, SETLabs

B.Tech.

32

Aug 25, 1997

11

13,16,634

BPL Uswest Cell Ltd., PL

Krithika Muthukrishnan

Engagement Leader, Corporate

B.E., PGD

33

Mar 6, 2000

10

19,96,151

Tata Strategic Management Group, Associate Consultant

Kumar B. V.

Principal Researcher & Technologist, SETLabs

B.Sc., M.Tech., M.Sc., Ph.D

48

Apr 21, 2003

18

24,12,772

Sun Microsystems, Senior Technology Consultant

Lalit Suresh Kathpalia

DM, NMS

Diploma, B.E.

41

Apr 14, 2004

19

3,29,527

HSBC Software Development (India) Pvt. Ltd., Delivery Head

Madhuchandra R.

Senior PM, Finacle

B.Sc.

36

Mar 11, 1996

14

2,44,774

Intellect Data Systems & Software Pvt. Ltd., Senior Executive Co-ordinator

Madhusudhan B. S.

Principal Consultant, PLES

B.E., M.Tech., Ph.D

46

Jul 22, 2002

22

28,88,346

GE India Tech. Centre, Mechanical Engineer

Mahesh Venugopalan

Case Leader, Corporate

B.E., MBA

36

Sept 15, 2000

11

4,27,447

Gallup Mba (G) Pvt. Ltd., Associate Project Director

Manish Agarwal

Senior Technical Architect, ES

B.Tech., M.S.

34

Apr 7, 2003

10

10,98,917

Ezcommerce Global Solutions, Principal Consultant

Manish Kulkarni

Principal Consultant, IMS

Diploma, B.E.

38

Oct 1, 2007

16

14,12,142

Manjunath Kunchum Subramanya

Manager, Shared Services, HRD

B.E.

34

Jan 13, 2003

12

2,50,625

Avaya India, Group Manager Toyota Kirloskar Motor Pvt. Ltd., Assistant Manager – Purchasing

Manmohan R. Kandoi

GPM, IHL

B.E.

34

Apr 28, 1997

13

2,74,384

L&T Ltd., PM

Manohar Baburao Powar

GPM, PE

B.E., M.E.

42

Dec 2, 2004

21

4,74,853

TCS Ltd., Associate Consultant

Maruthi V. S. R. Kaza

GPM, RETL

Diploma, AMIE

38

Nov 26, 2001

18

4,23,168

Md. Iqbal

DM, SETLabs

B.Tech.

36

May 2, 1994

14

28,23,342

Merwin Fernandes

VP, Finacle

B.Com.

48

Aug 6, 1997

27

34,73,495

Milind A. Pol

Senior PM, Corporate Planning

B.Tech.

34

Oct 13, 1997

11

3,47,070

Satyam Computer Services Ltd., Associate Consultant Kirloskar Computer Services, Associate Engineer DSQ Software Ltd., Business Development Manager Suneeta Precision Tools, Engineer

Mirza Barkatullah Baig

Regional Manager, CCD

Diploma, B.E.

36

Jul 10, 2006

12

3,81,490

Nagaraj N. S.

AVP, SETLabs

B.E.

38

Jun 22, 1992

16

13,87,306

—

Executive Office of The President, Branch Chief

Nandakumar Thiruvengadam

DM, IVS

B.Com., AICWA, ACS.

44

Aug 28, 2006

23

10,87,822

Hexaware Technologies Ltd., AVP

Nandita Mohan Gurjar

VP and Group Head, HRD

B.A., M.A.

47

Dec 3, 2007

18

13,38,284

Infosys BPO Ltd., PR, VP & Head of HRD

Narayanan Venkataraman

DM, BCM

B.E., M.S.

39

Jun 11, 2007

17

20,44,608

Changepond Technologies Ltd., Divisional Manager

Naveen Malhotra

Group Manager, Go-to-Market, Corporate Marketing

B.E.

37

Oct 8, 2007

16

11,91,031

Satyam Computer Services Ltd., Head – Multiple Business

Nithyanandan R.

AVP & General Counsel, Legal, Finance

B.A., LLB (H)

32

Dec 7, 1998

10

16,29,921

RIL, Lawyer

Nitin Abhange

GPM, NMS

B.E., M.Tech.

35

Feb 26, 1996

11

10,12,238

Prakash Babu

GPM, PE

B.Tech., M.E.

36

Nov 7, 1994

14

3,17,362

Prasad Balakrishna Honnavalli

Principal Consultant, SI

B.E.

42

Aug 20, 2007

18

17,01,052

Naga Malleswara Prasad Sivalanka

GPM, EUS

B.Sc., M.Sc.

35

Aug 29, 1994

13

5,07,780

Prashant Pungliya L.

GPM, Corporate Planning

Diploma, B.E.

35

Feb 9, 1999

13

14,18,874

Pravin Chandra Bolar

Principal Consultant, IMS

B.E., MBA

36

Nov 14, 2005

16

5,88,493

Preeti Chandrashekhar

Senior Principal, Consulting Solutions

B.Sc. (H), M.Sc., M.Phil

42

Jul 31, 2000

17

33,61,781

Prixit Raj

Group Leader, Process Deployment, Quality

Diploma, B.A., PGD

36

Feb 29, 2000

15

40 |

Power of talent

— BPL Ltd., General Engineering Sword Global India Pvt. Ltd., Technical Director — Uniplus Consultants, Programmer Analyst DHL, I.S. Director LIC of India, Admin. Officer

2,11,742 Woodward Governor India Pvt. Ltd., Assistant Manager

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Gross Previous Employment – Designation remuneration (Rs.)

Pushpak Banerjee

GPM, EUS

B.E.

37

Dec 26, 2002

14

17,35,682

Raghu Iyer

GPM, IS

B.Sc., MBA, Ph.D

51

Jun 1, 2006

18

4,67,808

Apar Technologies, Consultant Pro Un Ltd., Consultants, Programme Manager

Rajeev Wahi

Principal, RETL

B.Tech., PGD

37

Apr 2, 2007

14

24,02,474

Rajesh Kalyanshetti

Senior Technical Architect, SI

B.E.

35

Aug 5, 1996

12

2,67,459

Gec Alsthom India, General Engineering

TCS Ltd., Regional Manager

Raju Goteti

Group Manager, Go-to-Market, Corporate Marketing

B.Tech., M.E.

45

Jul 19, 2002

20

4,99,626

Oracle Corporation, Senior Solution Manager

Rakesh Ramchandra Shinde

Principal Architect, MFG

BCS, MCS

34

Dec 2, 2002

14

25,91,150

Van Alen Inc., Consultant

Rakesh Sharad Jadhav

Senior PM, MFG

B.E., PGD

36

Sept 29, 2003

11

2,47,045

SAS India, Associate Consultant

Ram Prasad Mamidi

Principal Consultant, SI

B.E.

38

Dec 24, 2007

17

6,71,924

Airtel, General Manager

Rama Krishna Venkata Siva Chinta

Principal Architect, SETLabs

B.Tech.

41

Sept 23, 2004

19

13,69,257

Satyam Computers Services Ltd., Delivery Head

Ramachandran Kallankara

AVP, ES

B.Tech., PGD

45

May 10, 1993

21

23,97,866

Canbank Financial Services, Project Executive

Ramakanta Mohapatra

DM, SI

B.Sc., B.Laws, MCA

38

Oct 29, 2007

14

10,48,244

TCS Ltd., Senior Consultant

Ramanan Raghavan

GPM, MFG

B.E., M.Sc.

36

Sept 11, 2000

13

13,50,613

SRA Systems Ltd., Deputy Manager

Ramaseshan Suthamally Subramanian

GPM, CME

B.Sc., M.Sc.

37

Jun 25, 2007

15

20,33,619

Siemens Public Communication Networks Pvt. Ltd., Senior Manager, Software Development

Ramesh S.

AVP – HR Consulting & Internal Communications, HRD

B.Tech., PGD

40

Sept 18, 1996

17

7,69,715

Ravi Ranjan Gorremuchu

GPM, EUS

B.Tech., M.Tech.

38

Aug 6, 2007

16

16,52,516

VST Industries Ltd., Personnel Executive Keane, General Manager

Ravikumar Sreedharan

Senior Principal Consultant, ES

B.Tech.

36

May 5, 2003

14

21,02,094

Satyam Computer Services Ltd., Account Manager

Ravindra M.P.

SVP, E&R

B.Sc., M.Sc., Ph.D

60

Aug 13, 2001

34

53,55,399

HCL Technologies, Head, SDC & VP

Ravishankar M. R.

AVP, PLES

B.E., M.E.

42

Jan 16, 1998

20

8,99,833

TCS Ltd., Associate Consultant

Renuka S. R.

Principal Architect, SETLabs

B.E.

33

Aug 25, 1997

11

3,44,526

BEL, Deputy Engineer

Rishi Kumar Jain

Group Lead, Corporate Planning

B.E., M.Tech.

35

Jun 24, 1996

11

15,86,365

—

Rudreshwar Sen

Product Manager, Product Incubation Engineering

B.Sc., M.Sc., M.Phil

40

Nov 8, 2007

17

11,51,638

Azul Systems, Deputy Director

Sajaneel S. Ankola

GPM, Canada

B.Sc., B.Sc. Tech

41

Jul 1, 1998

19

13,23,670

Tata Infotech, Manager

Sampath Kumar M. K.

GPM, EUS

B.Tech.

34

Aug 5, 1996

12

23,33,986

—

Sanjay Mohan

AVP and Head, Product Incubation Engineering

B.E., M.S.

42

May 24, 2007

18

33,67,645

IBM Global Service, General Manager

Sanjeev Goel

DM, EUS

B.E.

41

Feb 4, 1999

19

6,81,463

Santonu Sarkar

Principal Architect, SETLabs

B.E., M.Tech., Ph.D

41

Sept 16, 2002

15

17,91,781

Hughes Software Systems, Senior Technical Leader

Sathyanarayana Krishnamurthy

Principal Consultant, ES

B.E., M.Tech.

41

Apr 16, 2007

17

24,34,447

Enzen Global Solutions Pvt. Ltd., AVP

Satish Kumar Sundara Suri

Senior Consultant, ES

B.Tech.

33

Feb 10, 2003

11

10,54,889

Shailendra Jha

AVP, CME

B.E. (H)

47

Dec 1, 2000

26

8,30,020

Shammi Kapoor

DM, CME

B.Sc. Engg., PGD

45

Aug 13, 2007

17

17,60,041

Shireesh Jayashetty

Principal Architect, SI

B.E.

36

Nov 7, 1994

14

5,84,092

TCS Ltd., Associate Consultant

Deloitte Consulting, Senior Consultant Zensar Technologies Ltd., General Manager Alcatel India Ltd., Senior Manager Xlnet Software Systems, Trainee

Shivakumar Prabhakaran

Principal Consultant, IMS

Diploma

34

Feb 3, 2003

13

8,50,995

Shubhashis Sengupta

Principal Researcher, SETLabs

B.E., Ph.D

37

Jun 30, 2000

11

33,13,032

TELCO, Engineer

Soundara Rajan Ramanujam

Group Technical Consultant, PLES

B.Tech., M.E.

53

Jul 16, 2007

30

17,86,763

Honeywell Technology Solutions Lab Pvt. Ltd., SPM

Sreedhar Subramonia Iyer

Senior PM, PLES

B.Tech., MS

39

Aug 17, 2000

17

6,48,841

Srinivas Seshadri

Group Lead, Corporate Planning

B.E.

38

Apr 21, 1997

15

11,12,979

Aztec Software, Assistant Manager

Philips Software Centre, Technical Leader AT&T , SSIL, Engineer, QA/FST

Srinivas Thonse

Principal Architect, SETLabs

B.E.

38

Mar 23, 1992

16

12,56,273

PSI Data Systems Ltd., Software Engineer

Stephen Sanjay Desmond Emmanuel

DM, IVS

B.E.

33

Sept 3, 2007

13

14,13,920

The Vanguard Group, IT Manager

Subramaniam V.

GPM, CME

B.E.

40

Aug 21, 2006

18

15,10,301

Tata Teleservices Ltd., General Manager

Subramanian Sundaramurthy

DM, BCM

B.Sc., MCA

42

Sept 3, 2007

18

11,61,786

Siptech Solutions Ltd., VP

Sudhanshu Bahadur

Senior Principal, SaaS

B.Tech., MS, MBA

43

Feb 20, 2008

17

4,64,204

Suman Kumar Kanth

Group Test Manager, IVS

B.Sc. Engg., MBA, PGD

36

Jul 23, 2007

15

17,19,894 2,02,986

Suman Kumar Saha

PM, MFG

B.Sc., MCA

33

Aug 2, 1999

9

Sundararajan A. J.

Senior HR Manager, Business Partner, HRD

BA, MSW

41

Aug 2, 2004

17

Intel Technology India Pvt. Ltd., Senior Strategic Analyst Quark Media House India Pvt. Ltd., Director, QA HCl Perot Systems, Associate

7,10,501 Praxair India Ltd., Senior Manager – System HR

Infosys Annual Report 2007-08

| 41

Employee Name

Designation

Qualification

Age

Joining date

Experience (Years)

Gross Previous Employment – Designation remuneration (Rs.)

Sunder Prahlad Madakshira

Group Manager, Brand & Communication, Corporate Marketing

B.E., PGD, Ph.D

35

Nov 2, 2006

11

11,75,829

Sunil Kumar Dhareshwar

General Manager, International Taxes, Finance

C.A.

32

Jul 1, 1999

9

4,02,081

Visa International, Marketing Manager

—

Suresh Rajagopalan

DM, Finacle

B.Sc., MCA

40

May 14, 2007

18

25,07,348

First Gulf Bank, SVP – IT

Suryaprakash Viswanath Kareenahalli

DM, RETL

B.E., PGD

42

Oct 15, 2007

29

13,15,784

Wipro Technologies Ltd., General Manager

Tarun Mehta

Consultant, ES

B.Tech., PGD

31

Sept 8, 2004

6

2,19,253

Tejas Shantilal Faldu

Principal, RETL

B.E., PGD

36

Oct 18, 2004

12

14,19,471

3M India Ltd., Section Chief – Imports & Materials Mgmt.

Thirugnana Sambandam Gurunathan

Group Test Manager, IVS

B.E.

36

May 14, 2007

16

21,89,743

IBM Global Service, Program Manager IBM Global Services, Software Consultant

Asian Ppg Industries Ltd., Business Development Executive

Venkatesh S. G.

DM, Finacle

B.E.

38

May 6, 1999

16

12,72,105

Vinayak Vishnu Chiplunkar

DM, IHL

B.Sc., B.Sc. MCM (Applied), M.Sc.,

47

May 14, 2007

25

24,90,800 Patni Computer Systems Ltd., Senior Manager

Note: Remuneration includes basic salary, allowances, taxable value of perquisites, etc. The term remuneration has the meaning assigned to it in the Explanation to Section 198 of the Companies Act, 1956. None of the employees are related to any director of the Company. None of the employees own more than 2% of the outstanding shares of the Company as on March 31, 2008. The nature of employment is contractual in all the above cases.



for and on behalf of the Board of Directors



S. Gopalakrishnan

S. D. Shibulal



Chief Executive Officer and Managing Director

Chief Operating Officer and Director



Bangalore April 15, 2008

Designations AVP Associate Vice President CEO Chief Executive Officer COO Chief Operating Officer CTO Chief Technical Officer DM Delivery Manager GPM Group Project Manager PL Project Leader PM Project Manager SPM Senior Program Manager SVP Senior Vice President VP Vice President

42 |

Power of talent

Units at Infosys ANA Automotive and Aerospace APAC Asia Pacific BCM Banking and Capital Markets CCD Computers and Communications Division CDG Communication Design Group CSP Communication Service Providers DCG Domain Competency Group E&R Education and Research EMEA Europe, Middle East and Africa ES Enterprise Solutions F&A Finance & Administration GSE Global Sales Effectiveness HRD Human Resources Department HRPG High Risk Projects Group HTDM Hi-Tech and Discrete Manufacturing

IHL ILI IMS IS IVS MTC PE PLES REU SA&A SETLabs SGS SI TNS

Insurance Healthcare & Life Sciences Infosys Leadership Institute Infrastructure Management Services Information Systems Independent Validation Solutions Microsoft Technology Center Product Engineering Product Lifecycle and Engineering Solutions Energy, Utilities and Resources Security Audit and Architecture Software Engineering and Technology Labs Strategic Global Sourcing Systems Integration Transportation and Services

Infosys Annual Report 2007-08

| 43

– Loss: 7

– Loss: 54

– Profit: 101

– Profit: 89

Infosys Technologies (China) Co. Ltd. Mar 31, 2008 Dec 31, 2007 100.00% in equity 100.00% in shares capital 1,01,08,869 shares of A$ 0.11 par value, fully paid up NA

Infosys Technologies (Australia) Pty. Ltd.

Loss: 181

–

Loss: 51

–

–

–

Loss: 7

–

Profit: 275

–

Profit: 150

–

Infosys Consulting, Infosys Infosys BPO Ltd. Inc. Technologies, Mexico. Mar 31, 2008 Mar 31, 2008 Mar 31, 2008 100.00% in equity 100.00% in 99.98% in equity shares capital shares 4,00,00,000 shares 3,38,22,319 equity of US$ 1.00 par shares of Rs. 10 value, fully paid up NA each fully paid up

Loss: 3

–

Profit: 4

–

NA

Mar 31, 2008 99.98% in equity shares

Infosys BPO S.R.O.*

–

–

Loss: 2

–

NA

1 AUD = Rs. 36.55 1 RMB = Rs. 5.71 1 USD = Rs. 40.02 1 MXN = Rs. 3.76 INR 1 CZK = Rs. 2.45 INR 1EUR = Rs. 63.25 1 PLN = Rs. 17.88 1 THB = Rs. 1.27

Infosys Technologies (Australia) Pty. Ltd Infosys Technologies (China) Co. Ltd. Infosys Consulting, Inc Infosys Technologies, Mexico. Infosys BPO Ltd. Infosys BPO s.r.o.* Pan Financial Shared Services India Pvt. Ltd.* P-Financial Services Holding B.V.* Infosys BPO (Poland) Sp.Z.o.o* Infosys BPO (Thailand) Ltd.*

Issued and subscribed share capital 4 46 169 22 34 3 22 108 4 9 224 (63) (222) (7) 451 4 (2) 1 41 (1)

– 32 – – – 1 – 4 7 6

Reserves Loans

228 15 (53) 15 485 8 20 113 52 14

Total assets 228 15 (53) 15 485 8 20 113 52 14

– – – – 111 – – 72 – –

– – – – 72 – – – – –

Total Investments liabilities Long-term Current

– – – – 183 – – 72 – –

Total 556 77 246 3 825 40 14 – 55 6

Turnover

Profit / Provision for (Loss) before taxation taxation 145 44 (7) – (51) – (7) – 158 8 7 3 (2) – – – 1 – (1) –

101 (7) (51) (7) 150 4 (2) – 1 (1)

Profit / (Loss) after taxation

–

–

in Rs. crore

– – – – – – – – – –

Proposed dividend

–

–

Loss:1

–

NA

Infosys BPO (Thailand) Ltd.* Dec 31, 2007 99.98% in equity shares

*Wholly-owned subsidiary of Infosys BPO Limited. Notes: 1. Information on Subsidiaries is provided in compliance with the Central Government Approval vide 47/56/2008 - CL - III dated 25 Feb, 2008. We undertake to make available the audited annual accounts and related information of subsidiaries, where applicable, upon request by any of our shareholders. The annual accounts will also be available for inspection during business hours at our registered office in Bangalore, India. 2. Infosys Mexico was incorporated in June 2007. In October 2007, Infosys BPO concluded a sale and purchase agreement with Koninklijke Phillips Electronics N.V (Phillips) by means of which IBPO made a 100% investment in the share capital amounting Rs.107 crore in P -Financial Services Holding B.V., the Netherlands entity (Holding Company), which in turn made an investment in three entities i.e. Pan Financial Shared Services India Pvt Ltd situated in Chennai (India), Infosys BPO (Poland) Sp.Z.o.o situated in Lodz (Poland) and Infosys BPO (Thailand) Limited, situated in Bangkok (Thailand).

Exchange rate as of March 31, 2008

Subsidiary

–

Profit: 1

–

NA

Infosys BPO (Poland) Sp.Z.o.o* Dec 31, 2007 99.98% in equity shares

–

–

–

NA

Pan Financial P-Financial Shared Services Services India Pvt. Ltd.* Holding B.V. * Dec 31, 2007 Dec 31, 2007 99.98% in 99.98% in equity equity shares shares

Note: 1. There is no change in the holding company’s interest in the subsidiary between the end of the financial year of the subsidiary and the end of the holding company’s financial year. 2. No material changes have occurred between the end of the financial year of the subsidiary and the end of the holding company’s financial year in respect of- (a) the subsidiary’s fixed assets (b) the subsidiary’s investments (c) the moneys lent by subsidiary (d) the moneys borrowed by subsidiary for any purpose other than that of meeting current liabilities.

Net aggregate profits / losses of the subsidiary for the current period so far as it concerns the members of the holding company a. dealt with or provided for in the accounts of the holding company b. not dealt with or provided for in the accounts of the holding company Net aggregate profits / losses for previous financial years of the subsidiary so far as it concerns the members of the holding company a. dealt with or provided for in the accounts of the holding company b. not dealt with or provided for in the accounts of the holding company

Financial period ended Holding company’s interest as of March 31, 2008 Shares held by the holding company in the subsidiary

Subsidiary

c) Statement pursuant to Section 212 of the Companies Act, 1956

Annexure to the directors’ report (contd.)

Directors’ responsibility statement d) The directors’ responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956 The financial statements are prepared in conformance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us; and guidelines issued by the Securities and Exchange Board of India on the historical cost convention; as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards. The accounting policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes on accounts. The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the form and substance of transactions, and reasonably present our state of affairs and profits for the year. To ensure this, we have taken proper and sufficient care in implementing a system of internal control and accounting records; for safeguarding assets; and for preventing and detecting frauds as well as other irregularities; which are reviewed, evaluated and updated on an ongoing basis. Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures have been followed. However, there are inherent limitations that should be recognized in weighing the assurances provided by any system of internal controls and accounts. The financial statements have been audited by M/s. BSR & Co., Chartered Accountants, and statutory auditors. The audit committee meets periodically with the internal auditors and the statutory auditors to review the manner in which the auditors are discharging their responsibilities, and to discuss auditing, internal control and financial reporting issues. To ensure complete independence, the statutory auditors and the internal auditors have full and free access to the members of the audit committee to discuss any matter of substance for and on behalf of the Board of Directors



S. Gopalakrishnan

S. D. Shibulal



Chief Executive Officer and Managing Director

Chief Operating Officer and Director



Bangalore April 15, 2008

Auditors’ certification on corporate governance To the members of Infosys Technologies Limited, We have examined the compliance of conditions of Corporate Governance by Infosys Technologies Limited (“the Company”), for the year ended on March 31, 2008, as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. for BSR & Co. Chartered Accountants

Natrajan Ramkrishna Partner Membership No: 32815

Bangalore April 30, 2008

44 |

Power of talent

Management’s discussion and analysis Overview The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, guidelines issued by the Securities and Exchange Board of India (SEBI) and Generally Accepted Accounting Principles (GAAP) in India. Our Management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs, profits and cash flows for the year.

A. Industry structure and developments Changing economic and business conditions, rapid technological innovation, proliferation of the internet, and globalization are creating an increasingly competitive market environment that is driving corporations to transform the manner in which they operate. Customers are increasingly demanding improved products and services with accelerated delivery times and at lower prices. To adequately address these needs, corporations are focusing on their core competencies and using outsourced technology service providers to help improve productivity, develop new products, conduct research and development activities, reduce business risk, and manage operations more effectively. The role of technology has evolved from supporting corporations to transforming them. The ability to design, develop, implement, and maintain advanced technology platforms and solutions to address business and customer needs has become a competitive advantage and a priority for corporations worldwide. Concurrently, the prevalence of multiple technology platforms and a greater emphasis on network security and redundancy have increased the complexity and cost of information technology (IT) systems, and have resulted in greater technology-related risks. The need for more dynamic technology solutions and the increased complexity, cost and risk associated with these technology platforms have created a growing need for specialists with experience in leveraging technology to help drive business strategy. There is an increasing need for highly skilled technology professionals in the markets in which we operate. At the same time, corporations are reluctant to expand their internal IT departments and increase costs. These factors have increased corporations’ reliance on their outsourced technology service providers and are expected to continue to drive future growth for such services. Although there has been a slight slowdown in the purchase of IT services during 2008 due to the slowdown of the global economy, there continues to be significant growth in the purchase of IT services. According to a leading analyst firm, IT services and outsourcing purchases during 2008 will grow at 9% as compared to 12% during 2007.

Increasing trend towards offshore technology services Outsourcing the development, management and ongoing maintenance of technology platforms and solutions has become very important. Corporations are increasingly turning to offshore technology service providers to meet their need for high quality, cost competitive technology solutions. As a result, offshore technology service providers have become mainstream in the industry and continue to grow in recognition and sophistication. The effective use of offshore technology services offers a variety of benefits, including lower total cost of ownership of IT infrastructure, lower labor costs, improved quality and innovation, faster delivery of technology solutions and more flexibility in scheduling. In addition, technology companies are also recognizing the benefits of offshore technology service providers in software research and development and related support functions,

and are outsourcing a greater portion of these activities. The range of services delivered offshore is also increasing. A leading analyst firm has forecasted that outsourcing expenditure on services will increase from US $226 billion in 2006 to an estimated US $328 billion by 2011. During the same period, spending on services in the business process outsourcing (BPO) market is likely to grow from US $144 billion to an estimated US $234 billion.

The India advantage India is recognized as the premier destination for offshore technology services. According to a factsheet published by NASSCOM in February 2008, IT services (excluding BPO, product development and engineering services) exports from India are expected to cross US $23 billion in fiscal 2008 and BPO exports from India are expected to cross US $10.9 billion. There are several key factors contributing to the growth of IT and IT-enabled Services (ITeS). High quality delivery: According to the Process Maturity Profile published by the Carnegie Mellon Software Engineering Institute in September 2007, approximately 250 Indian companies had acquired quality certifications with around 80 companies certified at SEI CMM Level 5 – higher than any other country in the world. SEI-CMM is the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model, which assesses the quality of organizations’ management system processes and methodologies. Level 5 is the highest level of the CMM assessment. Significant cost benefits: The NASSCOM Strategic Review 2007 suggests that India has a strong track record of delivering a significant cost advantage, with clients reporting savings of up to 25-50% over the original cost base. Abundant skilled resources: India has a large and highly skilled English-speaking labor pool. According to NASSCOM, India produces approximately 3.1 million university and college graduates, including approximately 5,00,000 technical graduates, annually. NASSCOM Strategic Review 2007 suggests that the large and growing pool of skilled professionals has been a key driver of the rapid growth in the Indian IT-ITeS sector. NASSCOM says that India has the singlelargest pool of suitable offshore talent – accounting for 28% of the total suitable talent pool available across all offshore destinations and outpacing the share of the next closest destination by a factor of at least 2.5. The factors listed above also make India the premier destination for other services such as ITeS, which we refer to as business process management. Industry analysts have observed that business process management services of leading offshore technology service providers have strong prospects for growth, given the providers’ experience, proven track record and breadth of client relationships. According to a factsheet published by NASSCOM in February 2008, the Indian ITeS and business process outsourcing services export market was US $8.4 billion in fiscal 2007 and is estimated to be between US $10.5-11 billion in fiscal 2008. While these advantages apply to many companies with offshore capabilities in India, we believe that there are additional factors critical to a successful, sustainable and scalable technology services business. These factors include the ability to: • effectively integrate onsite and offshore execution capabilities to deliver seamless, scalable services • increase depth and breadth of service offerings to provide a one-stop solution in an environment where corporations are increasingly reducing the number of technology services vendors they are using • develop and maintain knowledge of a broad range of existing and emerging technologies

Infosys Annual Report 2007-08

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• demonstrate significant domain knowledge to understand business processes and requirements • leverage in-house industry expertise to customize business solutions for clients • attract and retain high quality technology professionals, and • make strategic investments in human resources and physical infrastructure (or facilities) throughout the business cycle.

Evolution of technology outsourcing The nature of technology outsourcing is changing. Historically, corporations either outsourced their technology requirements entirely or on a stand-alone, project-by-project basis. In an environment of rapid technological change, globalization and regulatory changes, the complete outsourcing model is often perceived to limit a corporation’s operational flexibility and not fully deliver potential cost savings and efficiency benefits. Similarly, project-by-project outsourcing is also perceived to result in increased operational risk and co-ordination costs, and is seen as failing to fully leverage technology service providers’ extensive capabilities. To address these issues, corporations are developing a more systematic approach to outsourcing that necessitates their technology service providers to develop specialized systems, processes and solutions along with cost-effective delivery capabilities.

Global Delivery Model (GDM) Our Global Delivery Model allows us to produce where it is most cost-effective and sell services where it is most profitable. The GDM enables us to derive maximum benefit from: • access to our large pool of highly skilled technology professionals • 24-hour execution capabilities across multiple time zones • the ability to accelerate delivery times of large projects by simultaneously processing project components • physical and operational separation of client projects to provide enhanced security • cost competitiveness across geographical regions • built-in redundancy to ensure uninterrupted services, and • a knowledge management system that enables us to re-use solutions where appropriate. In a typical offshore development project, we assign a team of technology professionals to visit a client site and determine the scope and requirements of the project. Once the initial specifications of the project have been established, our project managers return to the relevant global development center to supervise a larger team of technology professionals dedicated to the development or implementation of the solution. Typically, a small team remains at the client site to manage project co-ordination and address changes in requirements as the project progresses. Teams return to the client site, when necessary, to ensure seamless integration. To the extent required, a dedicated team provides ongoing maintenance from our global development centers. The client’s systems are linked to our facilities, enabling simultaneous processing in our global development centers. Our model ensures that project managers remain in control of execution throughout the life cycle of the project, regardless of the location. For the past 17 years, we have successfully executed projects at our global development centers. We have 52 global development centers, of which 26 are located in India, 11 are in North America, 9 are in the Asia-Pacific region and 6 are in Europe. Our largest development centers are located in India. Our quality control processes and programs are designed to minimize defects and ensure adherence to pre-determined project parameters. Additionally, software quality advisors help individual teams establish

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Power of talent

appropriate processes for projects, and adhere to multi-level testing plans. The project manager is responsible for tracking metrics, including actual effort spent versus initial estimates, project budgeting and estimating the remainder of efforts required on a project. Our Global Delivery Model mitigates risks associated with providing offshore technology services to our clients. For our communication needs, we use multiple service providers and a mix of satellite, terrestrial and optical fiber links with alternate routing. In India, we rely on two telecommunications carriers to provide high-speed links inter-connecting our global development centers. Internationally, we rely on multiple satellite links to connect our Indian global development centers with network hubs in other parts of the world. Our significant investment in redundant infrastructure enables us to provide uninterrupted service to our clients. Our business continuity center in Mauritius enables us to transfer the execution of a portion of our business activities rapidly from our Indian global development centers to Mauritius, and is an example of our investment in redundant infrastructure.

End-to-end solutions We provide comprehensive end-to-end business solutions that leverage technology. Our service offerings include custom application development, maintenance and production support, package enabled consulting and implementation, technology consulting and other solutions, including business process management and solutions, product engineering solutions, infrastructure maintenance services, operations and business process consulting, testing solutions, and systems integration services. These offerings are provided to clients across multiple industry verticals including banking and capital markets, communications, energy, manufacturing and retail. We also provide a core banking software solution, Finacle®, and provide customization and implementation services around this solution. We complement our industry expertise with specialist support for our clients. We also leverage our Software Engineering and Technology Labs (SETLabs) to create customized solutions for our clients. In addition, we continually evaluate and train our professionals in new technologies and methodologies. Finally, we ensure the integrity of our service delivery by utilizing a scalable, redundant and secure infrastructure. We generally assume full project management responsibility in each of our solution offerings. We strictly adhere to our SEI-CMMI Level 5 internal quality and project management processes. Our knowledge management system enables us to leverage existing solutions across the organization, where appropriate. We have developed in-house tools for project management and software life cycle support. We also bring to bear our unique methodologies in our consulting practice to provide value added services to our clients. These processes, methodologies, knowledge management systems and tools reduce the overall cost to the client, and enhance the quality and speed of delivery. Our engagements generally include more than one of the solutions. Revenues attributable to custom application development, maintenance and production support, software re-engineering, package-enabled consulting and implementation and technology consulting services represented a majority of our total revenues in fiscal 2008.

Critical accounting policies We consider the policies related to (a) use of estimates, (b) revenue recognition, and (c) income tax to be critical to an understanding of our financial statements as their application places the most significant demands on the Management’s judgement, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. Details of policies adopted by us have been provided in Schedule 23.1, Significant Accounting Policies, in the schedules to financial statements for the year ended March 31, 2008.

B. Financial condition

The details of the increase are provided in the table below: 2008 Equity shares (No.)

A summary of our financial position as at March 31, 2008 and 2007 is given below: in Rs. crore

March 31, 2008

Sources of funds Shareholders’ funds Share capital Reserves and surplus Application of funds Fixed assets Original cost Depreciation Net book value Capital workinprogress Investments Deferred tax assets Current assets, loans and advances Sundry debtors Cash and bank balances Loans and advances Current liabilities Provisions Net current assets

286

% March 31, 2007

2.1

13,204 97.9 13,490 100.0

4,508 33.4 (1,837) (13.6) 2,671 19.8

1,260 3,931 964 99

9.3 29.1 7.2 0.7

286

% Growth %

2.6

–

10,876 97.4 11,162 100.0

21.4 20.9

3,889 34.8 (1,739) (15.6) 2,150 19.2

957 3,107 839 79

8.6 27.8 7.6 0.7

15.9 5.6 24.2

31.7 26.5 14.9 25.3

Share capital – beginning of the year 57,12,09,862 Add: Capitalization of general reserves for bonus issue – Add: Shares issued upon ESOP exercise The 1998 Plan 5,00,465 The 1999 Plan 2,85,431 Sub-total 7,85,896 Share capital – end of the year 57,19,95,758

2007 Rs. Equity shares crore (No.)

Rs. crore

286 27,55,54,980

138

– 27,68,43,176

138

– – –

22,00,938 1,66,10,768 1,88,11,706

1 9 10

286 57,12,09,862

286

Our equity shares are currently listed in India on the NSE and BSE and the NASDAQ in the U.S. Our market capitalization as of March 31, 2008 was Rs. 82,362 crore, (previous year Rs. 1,15,307 crore) based on NSE price. The same was US $20.46 billion (previous year US $28.70 billion) based on NASDAQ price. As of March 31, 2008, the total number of shareholders on record was 5,55,562 and the total founder holding percentage was 16.52%.

2. Reserves and surplus 3,093

22.9

2,292

20.5

34.9

6,429

47.7

5,470

49.0

17.5

2,705 12,227

20.1 90.7

(1,483) (2,248) (3,731) 8,496 13,490

(11.0) (16.7) (27.7) 63.0 100.0

1,199 8,961

10.7 80.3

125.6 36.4

(1,162) (10.4) (662) (5.9) (1,824) (16.3) 7,137 63.9 11,162 100.0

27.6 239.6 104.6 19.0 20.9

Sources of funds 1. Share capital At present, we have only one class of shares – equity shares of par value Rs. 5/- each. Our authorized share capital is Rs. 300 crore, divided into 60 crore equity shares of Rs. 5/- each. The issued, subscribed and paid up capital as of March 31, 2008 and March 31, 2007 was Rs. 286 crore. During the year, employees exercised 5,00,465 equity shares issued under the 1998 Stock Option Plan, and 2,85,431 equity shares issued under the 1999 Stock Option Plan. Consequently, the issued, subscribed and outstanding shares increased by 7,85,896 and share capital increased by Rs. 0.39 crore. Details of options granted, outstanding and vested as of March 31, 2008 are given elsewhere in this report. In fiscal 2007, we allotted bonus shares in the ratio of 1:1 resulting in an addition of 27,68,43,176 equity shares. The bonus issue resulted in an increase of paid up capital by Rs. 138 crore which was capitalized from general reserves.

A summary of reserves and surplus is provided in the table below: in Rs. crore

2008 6 2,851 3,705 6,642 13,204

a. Capital reserve b. Share premium c. General reserve d. Profit and loss account Total

a.

2007 6 2,768 3,258 4,844 10,876

Capital reserve

The balance as of March 31, 2008 amounted to Rs. 6 crore, same as in the previous year.

b.

Share premium

A statement of movement in the share premium account is given below: in Rs. crore

Balance – beginning of the year Add: Premium on ESOP exercise Income tax benefit arising from ESOP exercise Balance – end of the year

2008 2,768 58

2007 1,543 1,206

25 2,851

19 2,768

The addition to the share premium account of Rs. 58 crore during the year is on account of premium received on issue of 7,85,896 equity shares, on exercise of options under the 1998 and 1999 stock option plans. The Finance Act, 2007 included Fringe Benefit Tax (FBT) on Employees Stock Option Plan. FBT liability crystallizes on the date of exercise of stock options. During the year ended March 31, 2008, 7,85,896 equity shares were issued pursuant to the exercise of stock options by employees under both the 1998 and 1999 stock option plans. FBT on exercise of stock options of Rs. 2 crore has been paid by us and subsequently recovered from the employees. Consequently, there is no impact on the profit and loss account.

Infosys Annual Report 2007-08

| 47

An amount of Rs. 25 crore (Rs. 19 crore in the previous year) was credited to the share premium account arising due to tax benefits in overseas jurisdiction of deductions earned on exercise of employees stock options, in excess of compensation charged to the profit and loss account.

c.

Application of funds 3. Fixed assets A statement of movement in fixed assets is given below:

Land: Freehold Leasehold Buildings Plant and machinery Computer equipment Furniture and fixtures Vehicles Gross block Less: Accumulated depreciation Net block Add: Capital work-in-progress Net fixed assets Depreciation as % of revenues as % of average gross block* Accumulated depreciation as % of gross block*

A statement of movement in the general reserves is given below: in Rs. crore

Balance – beginning of the year Add: Transfer from P&L account Fair value of options issued in exchange for IBPO options Less: Gratuity transitional liability Capitalized for bonus issue Balance – end of the year

2008 3,258 447

2007 3,015 378

– – – 3,705

12 (9) (138) 3,258

An amount of Rs. 447 crore representing 10% of the profits for the year ended March 31, 2008 (previous year Rs. 378 crore) was transferred to the general reserves account from the profit and loss account. Effective April 1, 2006, we adopted the revised accounting standard on employee benefits. Pursuant to the adoption, our transitional obligations amounted to Rs. 9 crore. As required by the standard, the obligation was recorded with the transfer to general reserves in fiscal 2007. On July 15, 2006, we allotted bonus shares in the ratio of 1:1 resulting in an addition of 27,68,43,176 equity shares. The bonus issue resulted in an increase of paid-up capital by Rs. 138 crore which was capitalized from general reserve in fiscal 2007. In January 2007, we initiated the purchase of outstanding options in Infosys BPO from its option holders. The option holders were given a choice to sell their options and / or swap Infosys BPO options for Infosys options at a swap ratio based on fair market value. Consequent to this proposal, we granted 1,51,933 Infosys options under the 1999 Plan valued at a fair value of Rs. 12 crore. Accordingly, the investment in Infosys BPO and the general reserves had increased by Rs. 12 crore in fiscal 2007.

d.

in Rs. crore

General reserves

Profit and loss account

The balance retained in the profit and loss account as of March 31, 2008 is Rs. 6,642 crore, after providing the interim and final dividend for the year of Rs. 758 crore and one-time special dividend of Rs. 1,144 crore and dividend tax of Rs. 323 crore thereon. The total amount of profits appropriated to dividend including dividend tax was Rs. 2,225 crore, as compared to Rs. 751 crore in the previous year.

Shareholder funds The total shareholder funds increased to Rs. 13,490 crore as of March 31, 2008 from Rs. 11,162 crore as of the previous year end. The book value per share increased to Rs. 235.84 as of March 31, 2008 compared to Rs. 195.41 as of the previous year-end.

*

2008 131 98 1,953 823 961 539 3 4,508 (1,837) 2,671 1,260 3,931

2007 Growth% 76 72.4 95 3.2 1,471 32.8 760 8.3 944 1.8 541 (0.4) 2 50.0 3,889 15.9 (1,739) 5.6 2,150 24.2 957 31.7 3,107 26.5

3.5 13.7

3.6 14.6

42.9

46.8

Excluding land

The details of built-up area and seats are provided in the table below: Built-up area (sq. ft. in million) Completed In progress Seats (No.) Completed In progress

a.

2008

2007

16.48 8.36

11.96 10.31

77,754 26,881

58,488 32,967

Capital expenditure

We incurred an amount of Rs. 1,370 crore (Rs. 1,443 crore in the previous year) as capital expenditure comprising of additions to gross block of Rs. 1,067 crore and Rs. 303 crore on account of increase in capital work-in-progress. The entire capital expenditure was funded out of internal cash flows.

b.

Additions to gross block

During the year, we added Rs. 1,067 crore to our gross block comprising Rs. 189 crore for investment in computer equipment and the balance of Rs. 878 crore on infrastructure investment. We invested Rs. 58 crore to acquire 471 acres of land at Chennai and Hyderabad. Due to several new development centers being operationalized, details of which are provided elsewhere in this Annual Report, the expenditure on buildings, computer equipment, plant and machinery, furniture and fixtures and vehicles increased by Rs. 482 crore, Rs. 189 crore, Rs. 210 crore, Rs. 127 crore and Rs. 1 crore, respectively. During the previous year, we added Rs. 1,058 crore to our gross block, including investment in computer equipment of Rs. 249 crore and the balance of Rs. 809 crore on infrastructure investment.

c.

Deductions to gross block

During the year, we deducted Rs. 448 crore (net book value of zero) from the gross block comprising Rs. 440 crore of retirement on assets, Rs. 7 crore on donation of computer systems and Rs. 1 crore on disposal of various assets. During the previous year, we retired / transferred various assets with a gross block of Rs. 6 crore and Rs. 1 crore book value.

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Power of talent

d.

Capital expenditure commitments

We have a capital expenditure commitment of Rs. 600 crore, as of March 31, 2008 as compared to Rs. 655 crore as of March 31, 2007.

4. Investments We make several strategic investments which are aimed at procuring business benefits for us. The details of investments as of March 31, 2008 and the movement in the investment account during the year is summarized in the table below: in Rs. crore

Company

Subsidiaries Infosys BPO Limited Infosys Technologies (China) Co. Limited Infosys Technologies (Australia) Pty. Ltd. Infosys Consulting, Inc. Infosys Technologies, S. de R. L. de C. V. Others OnMobile Systems Inc., USA M-Commerce Ventures Pte. Ltd., Singapore Less: Provision for investments Total

March 31, 2007

Additions

Redeemed / written off

Provisions

March 31, 2008

% of holding as at the year end

637 46 66 90 NA 839

22 – – 81 22 125

– – – – – –

– – – – – –

659 46 66 171 22 964

99.98 100.00 100.00 100.00 100.00

9 2 11 (11) 839

– – – – 125

– – – – –

9 2 11 (11) –

– – 11 (11) 964

The revenues, net profit and net worth information relating to our subsidiaries are provided below: in Rs. crore

Infosys BPO Limited – Consolidated Infosys Technologies (China) Co. Limited Infosys Technologies (Australia) Pty. Ltd. Infosys Consulting, Inc. Infosys Technologies, S. de R. L. de C. V. Total

2008

Revenues 2007

937 77 556 246 3 1,819

662 60 446 213 NA 1,381

Infosys Consulting, Infosys China and Infosys Mexico are in the investment phase and this has resulted in the reported losses. The information relating to related party transactions with subsidiaries is given elsewhere in the report. The details of employees in each of the subsidiaries is provided in the table below: No.

Infosys BPO Limited – Consolidated Infosys Technologies (China) Co. Limited Infosys Technologies (Australia) Pty. Ltd. Infosys Consulting, Inc. Infosys Technologies, S. de R. L. de C. V.

2008 16,295 699 363 265 75

2007 11,226 669 306 209 NA

Majority owned subsidiary Infosys BPO Limited We established Infosys BPO Limited as a majority owned and controlled subsidiary on April 3, 2002, to provide business process management services. Infosys BPO seeks to leverage the benefits of service delivery globalization, process redesign and technology to drive efficiency and cost effectiveness in customer business processes. The movement of investment in Infosys BPO is provided in the following table:

Growth (%) 41.5 28.3 24.7 15.5 – 31.7

2008 153 (7) 101 (51) (7) 189

Net Profit / (Loss) Net worth 2007 Growth % of revenue As of March (%) for fiscal 2008 31, 2008 152 0.7 16.3 491 (29) 75.9 (9.1) (17) 71 42.3 18.2 228 (111) 54.1 (20.7) (53) NA – (233.3) 15 83 127.7 10.4 2008 Shares (No.)

Balance – beginning of the year 3,34,61,902 Shares purchased from IBPO employees 3,60,417 Shares purchased from Citicorp – Purchase of unvested options from IBPO employees – Options swap with IBPO employees – Balance – end of 3,38,22,319 the year

2007 Rs. Shares (No.) crore

Rs. crore

637 2,44,99,993

25

22

2,11,909

12

–

87,50,000

530

–

–

58

– – 659 3,34,61,902

12 637

During the year ended March 31, 2008, we completed the purchase of 3,60,417 Infosys BPO shares from its employee shareholders, consequent to the forward share purchase agreement entered with them in February 2007. Following this, our holding in Infosys BPO is 99.98%.

Infosys Annual Report 2007-08

| 49

Wholly-owned subsidiaries

The movement in provisions for doubtful debts during the year is as follows:

Infosys Technologies (China) Co. Limited On October 10, 2003, we set up a wholly-owned subsidiary in the People’s Republic of China named Infosys Technologies (China) Co. Limited.

Infosys Technologies (Australia) Pty. Limited On January 2, 2004, we acquired 100% of equity in Expert Information Services Pty. Limited, Australia, and renamed the company as Infosys Technologies (Australia) Pty. Limited. The consideration comprised a payment in cash of Rs. 66 crore on conclusion and an earn-out on achieving financial conditions over a three-year period ending March 31, 2007. We paid Rs. 40 crore as earnout for the three year period ending March 31, 2007. On April 8, 2004, we set up a wholly-owned subsidiary, Infosys Consulting, Inc., incorporated in Texas, USA, to add high-end consulting capabilities to our Global Delivery Model. During the year, an additional investment of US $20 million (Rs. 81 crore) was made in Infosys Consulting, Inc., to fund its operational requirements. The subsidiary is still in the investment phase and is expected to break even in the near future.

Infosys Technologies S. de R. L. de C. V., Mexico During the year, we incorporated Infosys Technologies, S. de R. L. de C. V., a wholly-owned subsidiary in Mexico, to improve proximity to our North American clients. As of March 31, 2008, we had invested an aggregate of Mexican Pesos 60 million (Rs. 22 crore) in the subsidiary.

5. Deferred tax assets We recorded deferred tax assets of Rs. 99 crore as of March 31, 2008 (Rs. 79 crore as of March 31, 2007). Deferred tax assets represent timing differences in the financial and tax books arising from depreciation on assets and provision for sundry debtors. We assess the likelihood that our deferred tax assets will be recovered from future taxable income. We believe it is more likely than not that we will realize the benefits of these deductible differences.

6. Sundry debtors Sundry debtors amount to Rs. 3,093 crore (net of provision for doubtful debts amounting to Rs. 40 crore) as of March 31, 2008, compared to Rs. 2,292 crore (net of provision for doubtful debts amounting to Rs. 22 crore) as of March 31, 2007. These debtors are considered good and realizable. Debtors are at 19.8% of revenues for the year ended March 31, 2008, compared to 17.4% for the previous year, representing a DSO (days sales outstanding) of 72 days and 64 days for the respective years. We collected an amount of Rs. 208 crore in the first week of April 2008. Including this, the DSO would have been 67 days as against the reported 72 days. Our largest client constituted 21.4% of sundry debtors as of March 31, 2008. No single client constituted more than 10% of sundry debtors as of March 31, 2007. The age profile of debtors is given below: in %

2008 58.3 29.1 3.9 8.7 100.0

2007 58.5 36.7 2.1 2.7 100.0

Provisions are generally made for all debtors outstanding for more than 180 days as also for others, depending on the Management’s perception of the risk. The need for provisions is assessed based on various factors, including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors which could affect the customer’s ability to settle.

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Power of talent

The unbilled revenues as of March 31, 2008 and 2007 amounted to Rs. 472 crore and Rs. 312 crore respectively.

7. Cash and cash equivalents

Infosys Consulting, Inc.

Days 0-30 31-60 61-90 91 +

in Rs. crore

2008 2007 Opening balance 22 10 Add: Amount provided 42 24 Less: Amount written-off 24 12 Closing balance 40 22 Provision for bad and doubtful debts as a percentage of revenue is 0.27% in fiscal 2008 as against 0.18% in fiscal 2007.

The bank balances in India include both Rupee accounts and foreign currency accounts. The bank balances in overseas current accounts are maintained to meet the expenditure of the overseas branches and project-related expenditure overseas. in Rs. crore

Cash balances Bank balances in India Current accounts Deposit accounts Foreign currency accounts (EEFC) Unclaimed dividend account Bank balances outside India Current accounts Total cash and bank balances Deposits reported under loans and advances Total cash and cash equivalents Cash and equivalents / assets Cash and equivalents / revenues

2008 –

2007 –

60 5,772 181 2

169 4,790 131 2

414 6,429 1,260 7,689 57.0% 49.1%

378 5,470 140 5,610 50.3% 42.7%

The deposit account represents deposits of maturity up to 365 days. Details of the same are given below: in Rs. crore

ICICI Bank Limited State Bank of India Bank of Baroda Bank of India IDBI Bank HDFC Bank Corporation Bank Bank of Maharashtra Barclays Bank Axis Bank HSBC Bank The Bank of Nova Scotia Canara Bank Standard Chartered Bank ABN AMRO Bank N.V. Citibank N.A. Calyon Corporate Bank Punjab National Bank ING Vysya Bank Limited BNP Paribas Total

2008 1,000 1,000 500 500 475 450 440 362 280 250 250 150 115 – – – – – – – 5,772

2007 500 150 500 500 – – 300 50 – 300 100 300 500 500 350 300 225 175 25 15 4,790

Our treasury policy calls for investing surpluses with highly-rated companies, banks and financial institutions for maturities up to 365 days, as also with liquid mutual funds with a limit on investments in individual entities.

8. Loans and advances in Rs. crore

Unsecured, considered good Loans to subsidiary Advances Pre-paid expenses Interest accrued but not due Advance to Gratuity Fund Trust For supply of goods and rendering of services Others Sub-total Unbilled revenues Advance income tax MAT credit entitlement Loans and advances to employees Electricity and other deposits Rental deposits Deposits with financial institutions and body corporate* Mark-to-market on options / forward contracts Total

2008

2007

32

22

27 186 12

28 51 –

10 20 287 472 215 169 106 24 11

3 20 124 312 352 – 105 20 10

1,421

261

– 2,705

15 1,199

An amount of Rs. 161 crore (Rs. 121 crore as at March 31, 2007) deposited with the Life Insurance Corporation of India to settle leave obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and hence not considered as “cash and cash equivalents”. *

During the year, we disbursed an amount of Rs. 10 crore (US $3 million) as loan to our wholly-owned subsidiary, Infosys Technologies (China) Co. Limited. The loan is repayable within five years from the date of disbursement at the discretion of the subsidiary. As of March 31, 2008, the outstanding loan was Rs. 32 crore (US $8 million). Advances are primarily toward amounts paid in advance for value and services to be received in future. Unbilled revenues represent revenue recognized in relation to efforts incurred on fixed-price and time-andmaterial contracts not billed as of the year-end. Advance income tax represents payments made toward tax liability and also refund due for the previous years. The details of advance income tax are given below: in Rs. crore

Domestic tax Overseas tax

2008 132 83 215

2007 264 88 352

Pursuant to the changes in the Indian Income Tax Act, we have calculated our tax liability after considering Minimum Alternate Tax (MAT). This has not resulted in an additional tax expense as MAT can be set off against any future tax liability. Accordingly, Rs. 169 crore is shown under “Loans and advances” in the balance sheet as of March 31, 2008. Loans to employees have remained the same compared to the previous year, despite an increase in the number of employees. This is because we have discontinued fresh disbursements under all the loan schemes except for personal loans and salary advances which we continue to provide primarily to employees in India who are not executive officers or directors. We also provide allowances for purchase of cars and houses for our middle-level managers. The details of these loans are given below: in Rs. crore

Salary advances Soft loans Housing loans Other loans

2008 64 34 8 – 106

2007 63 27 13 2 105

The salary advances represent advances to employees, both in India and abroad, which are recoverable within 12 months. Electricity and other deposits represent electricity deposits, telephone deposits, insurance deposits and advances of a similar nature. The rent deposits are toward buildings taken on lease by us for our software development centers and marketing offices in cities across the world. Deposits with financial institutions and corporate bodies represent surplus money deployed in the form of short-term deposits. The details of such deposits are given below: in Rs. crore

HDFC Limited GE Capital Services India Restricted deposits Life Insurance Corporation of India* *

2008 1,000 260 1,260

2007 – 140 140

161 1,421

121 261

For funding leave obligations of employees

9. Current liabilities in Rs. crore

Sundry creditors for goods and services for accrued salaries and benefits For other liabilities Provision for expenses Retention monies Withholding and other taxes Mark-to-market on options / forward contracts Gratuity obligations–unamortized amount Due to option holders of IBPO Others Sub-total Advances received from clients Unearned revenue Unclaimed dividend Total

2008

2007

36 524

23 356

239 52 206

281 23 172

116 33 – 3 1,209 4 268 2 1,483

– – 2 4 861 4 295 2 1,162

Sundry creditors for accrued salaries and benefits include the provision for bonus and incentive payable to the staff and also our liability for leave encashment valued on an actuarial basis. The details are as follows: in Rs. crore

Accrued salaries payable Accrued bonus and incentive payable Unavailed leave as per actuarial valuation

2008 46 329

2007 28 208

149 524

120 356

Sundry creditors for other liabilities represent amounts accrued for various other operational expenses. Retention monies represent monies withheld on contractor payments pending final acceptance of their work. Withholding and other taxes payable represent local taxes payable in various countries in which we operate and the same will be paid in due course. The mark-to-market on options / forward contracts as of March 31, 2008 were Rs. 116 crore. Pursuant to the Institute of Chartered Accountants of India (ICAI) announcement “Accounting for Derivatives” on the early adoption of Accounting Standard AS 30 “Financial Instruments: Recognition and measurement”, we have early adopted the standard for the year under review, to the extent that the adoption does not conflict with the existing mandatory accounting standards and other authoritative pronouncements, companies law and regulatory requirements. The details on outstanding options / forward contracts are provided in the notes to the financial statements.

Infosys Annual Report 2007-08

| 51

Effective July 1, 2007, we revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by Rs. 37 crore, which is being amortized on a straight line basis to the profit and loss account over 10 years, representing the average future service period of employees. An amount of Rs. 4 crore was amortized during the year. The unamortized balance as of March 31, 2008 was Rs. 33 crore.

C. Results of operations Summary of financial results for the year ended March 31, 2008 and 2007 is given below: in Rs. crore

2008

Income: Software services Products Total income Software development expenses Gross profit Selling and marketing expenses General and administration expenses Operating profit (PBIDTA) Interest Depreciation Operating profit after interest and depreciation Other income, net Provision for investments Profit before tax and exceptional items Provision for tax* Net profit after tax before exceptional items Exceptional items, net of taxes Net profit after tax and exceptional items

Advances received from clients denote monies received for the delivery of future services. Unearned revenue consists primarily of advance client billing on fixed-price, and fixed-time frame contracts for which related costs were not yet incurred. Unclaimed dividends represent dividends paid, but not encashed by shareholders, and are represented by a bank balance of the equivalent amount.

10. Provisions in Rs. crore

Proposed dividend Tax on dividend Income taxes Post-sales client support

2008 1,559 265 381 43 2,248

2007 371 63 207 21 662

Proposed dividend represents the final dividend, including special dividend, we recommended to the shareholders. Upon approval by the shareholders, this will be paid after the Annual General Meeting. Provision for tax on dividend, including special dividend, denotes taxes payable on dividends declared for the year. Provisions for taxation represent estimated income tax liabilities, both in India and abroad. The details are as follows: in Rs. crore

Domestic tax Overseas tax

2008 72 309 381

2007 48 159 207

The provision for post-sales client support is toward likely expenses for providing post-sales client support on fixed-price contracts.

11. Net current assets

% Growth % 15,051 96.2 12,611 95.9 19.4 597 3.8 538 4.1 11.0 15,648 100.0 13,149 100.0 19.0 8,876 6,772

22.0 15.4

719

5.5

1.5

1,079 4,963 – 546

6.9 927 31.7 4,225 – – 3.5 469

7.0 32.1 – 3.6

16.4 17.5 – 16.4

4,417 683

28.2 4.4

3,756 375

28.5 2.9

17.6 82.1

–

–

2

–

–

5,100 630

32.6 4,129 4.0 352

31.4 2.7

23.5 79.0

4,470

28.6

3,777

28.7

18.3

–

–

6

0.1

–

4,470

28.6

3,783

28.8

18.2

730

Quarterly results of operations Summary of quarterly results for the year ended March 31, 2008 is given below: in Rs. crore

Income Gross profit Operating profit (PBIDTA) Net profit* Gross profit % Net profit %

in Rs. crore

2007

Power of talent

Q1 FY08 3,551 1,440 1,010 1,028 40.6 28.9

Q2 FY08 3,862 1,689 1,242 1,074 43.7 27.8

Q3 FY08 3,999 1,780 1,327 1,186 44.5 29.7

Q4 FY08 4,236 1,863 1,384 1,182 44.0 27.9

Net profit for Q1, Q3 and Q4 of fiscal 2008 includes a reversal of tax provisions amounting to Rs. 51 crore, Rs. 50 crore and Rs. 20 crore respectively.

*

600

655

2

2

3 2,148 508 140

15 770 1,158 168

As of March 31, 2008, our net foreign currency exposure that is not hedged by a derivative instrument or otherwise is Nil (Rs. 995 crore as at March 31, 2007).

52 |

4.7

Includes a reversal of tax amounting to Rs. 121 crore, and Rs. 125 crore for the year ended March 31, 2008 and March 31, 2007 respectively.

The statement of capital commitments and contingent liabilities as of March 31, 2008 and 2007 are given below:

Claims against the Company, not acknowledged as debts Forward contracts outstanding Options contract outstanding Lease obligations

56.7 7,278 43.3 5,871

*

12. Contingent liabilities

2008

2007

55.4 44.6

Net current assets as of March 31, 2008 were Rs. 8,496 crore, compared to Rs. 7,137 crore in the previous year. The current ratio was 3.28 as of March 31, 2008 as compared to 4.91 in the previous year.

Estimated amount of unexecuted capital contracts (net of advances and deposits) Outstanding guarantees and counter guarantees

%

1. Income The income for the year ended March 31, 2008 grew by 34.1% in US Dollar terms. However, income in Rupee terms grew by 19% on account of a 11.2% appreciation of the Rupee against the US Dollar during the year. Income (US $ million) Average US $ Rupee rate (Rs.) Income (Rs. crore)

2008 3,912 40.00 15,648

2007 2,918 45.06 13,149

% change 34.1 (11.2) 19.0

In constant Dollar terms (considering the average rate of fiscal 2007), the income in Rupee terms for fiscal 2008 was lower by Rs. 1,979 crore. Income from software services and products is as follows: in Rs. crore

Overseas Domestic

2008 15,429 219 15,648

% 98.6 1.4 100.0

2007 12,935 214 13,149

% Growth % 98.4 19.3 1.6 2.3 100.0 19.0

Our revenues are generated primarily on fixed-time frame or time-and-material basis. Revenue from software services on fixed-price and fixed-time frame contracts are recognized as per the proportionatecompletion method. On time-and-material contracts, revenue is recognized as the related services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in multiple arrangement contracts, where revenue is recognized as per the proportionate-completion method. The segmentation of software services by project type is as follows: in %

2008 2007 33.0 28.0 67.0 72.0 100.0 100.0 Our revenues are also segmented into onsite and offshore revenues. Onsite revenues are for those services which are performed at client sites as part of software projects, while offshore revenues are for services which are performed at our software development centers located in India. Fixed price Time-and-material

The segmentation of revenues by location (including product revenue) is as follows: in %

Onsite Offshore

2008 50.9 49.1 100.0

2007 51.7 48.3 100.0

The services performed onsite typically generate higher revenues per-capita, but at lower gross margins in percentage as compared to the services performed at our own facilities. Therefore, any increase in the onsite effort impacts our margins. The details of effort mix for software services and products in person months are as follows: in %

Onsite Offshore

2008 29.8 70.2 100.0

2007 30.1 69.9 100.0

The growth in software services and product revenues is due to an all-round growth in various segments of the business mix and is mainly due to growth in business volumes.

The details of the same are given below: 2008

2007

15,051 597 15,648

12,611 538 13,149

1,63,665 3,52,323 5,15,988 33,373 1,61,504 63,606 7,74,471 36,502 8,10,973

1,29,729 2,74,989 4,04,718 26,517 1,24,212 64,889 6,20,336 32,190 6,52,526

33,936 26.2 77,334 28.2 1,11,270 27.5 4.5

36,952 39.8 69,316 33.7 1,06,268 35.6 4.9

Income (in Rs. crore) Software services Software products Person months Software services Onsite Offshore Billed-total Software products Non-billable Training Sub-total Support Total Increase in billed person months Onsite % change Offshore % change Total % change Support / total (%)

Software services During the year, the volumes grew by 27.5% compared to 35.6% in the previous year. The onsite and offshore volume growth were 26.2% and 28.2% during the year, compared to 39.8% and 33.7% in the previous year. In US Dollar terms, onsite per capita revenues increased by 4.3% during the year, offshore per capita revenues increased by 7.2%, and blended per capita revenues increased by 5.3%. During the previous year, onsite per capita revenues increased by 6.4%, offshore per capita revenues increased by 2.4% and blended per capita revenues increased by 5.5% in US Dollar terms. Details of geographical and business segmentation of revenues and client concentration are provided elsewhere in this report.

Software products The revenues from software products grew 11% compared to 50.7% in the previous year. Of the software products revenue, 71.4% came from exports, compared to 67.4% in the previous year.

2. Expenditure 2.1 Software development expenses in Rs. crore

Revenues Software development expenses Salaries and bonus Technical sub-contractors Overseas travel expenses Cost of software packages Communication expenses Post-sales customer support Other expenses Total

2008

%

2007

% Growth % 15,648 100.0 13,149 100.0 19.0

7,017

44.8

5,640

42.9

24.4

975 431

6.2 2.8

864 392

6.6 3.0

12.9 9.9

238

1.5

217

1.6

9.7

55

0.4

52

0.4

5.8

46 114 8,876

0.3 0.7 56.7

12 101 7,278

0.1 283.3 0.8 12.9 55.4 22.0

Infosys Annual Report 2007-08

| 53

Employee costs consist of salaries paid to employees in India and include overseas staff expenses. The total software professionals person-months increased to 7,74,471 for the year ended March 31, 2008 from 6,20,336 person-months during the previous year, an increase of 24.8%. Of this, the onsite and offshore billed person months (including software products) are 1,63,665 and 3,85,696 for the year ended March 31, 2008, as compared to 1,29,729 and 3,01,506 for the previous year. The non-billable and trainees person-months were 2,25,110 and 1,89,101 during the current and previous year respectively. The non-billable and trainees person-months were 29.1% and 30.5% of the total software professional person-months for the current and previous year respectively. We added 22,671 employees (gross) and 13,659 employees (net) during the year as compared to 22,567 employees (gross) and 15,173 employees (net) during the previous year. The utilization rates of billable employees for the year ended March 31, are as below: in %

Including trainees Excluding trainees

2008 70.9 77.3

2007 69.5 77.6

We incurred software development expenses at 56.7% of revenues, compared to 55.4% during the previous year. The cost of sub-contractors includes Rs. 773 crore toward purchase of services from related parties, primarily subsidiaries in fiscal 2008, as against Rs. 633 crore in the previous fiscal. The details of such related party transactions are available in notes to accounts. The balance amount is toward availing the services of external consultants to meet mismatch in certain skill sets that are required in various projects. We continue to use these consultants on a need basis. During the year ended March 31, 2008, we voluntarily settled with the California Division of Labor Standards Enforcement toward possible overtime payment to certain employees in California, USA, for a total amount of Rs. 102 crore. We recorded health insurance liabilities based on the maximum individual claimable amounts by employees. During the year, we completed reconciliation of amounts actually claimed by employees to date, including past years, with the aggregate amount of recorded liability, and the net excess provision of Rs. 71 crore was written back. The overseas travel expenses, representing cost of travel abroad for software development, constituted approximately 2.8% and 3.0% of total revenue for the years ended March 31, 2008 and 2007. Overseas travel expenses include visa charges of Rs. 133 crore (0.8% of revenues) for the year, compared to Rs. 109 crore (0.8% revenues) in the previous year. Cost of software packages represents the cost of software packages and tools procured for our internal use for enhancing the quality of our services and also for meeting the needs of software development, and includes software procured from third parties for resale with our banking product. The cost of software packages was 1.5% and 1.6% of the revenues for the year ending March 31, 2008 and 2007. Our accounting policy is to charge such purchases to the profit and loss accounts in the year of purchase. A major part of our revenues come from offshore software development. This involves the large-scale use of technological connectivity in order to be online with clients. The communication expenses represent approximately 0.4% of revenues for the years ended March 31, 2008 and 2007, respectively. The provision for post-sale customer support was Rs. 46 crore (0.3% of revenue) and Rs. 12 crore (0.1% of revenue) for the year ended March 31, 2008 and 2007, respectively. Other expenses representing staff welfare, computer maintenance, consumables and rent have reduced to 0.7% of revenues during the year from 0.8% in the previous year.

54 |

Power of talent

2.2 Gross profit The gross profit during the year was Rs. 6,772 crore representing 43.3% of revenues compared to Rs. 5,871 crore representing 44.6% of revenues in the previous year.

2.3 Selling and marketing expenses We incurred selling and marketing expenses at 4.7% of our total revenues, compared to 5.5% during the previous year. in Rs. crore

2008

%

2007

% Growth % 100.0 19.0

Revenues 15,648 100.0 13,149 Selling and marketing expenses Salaries and bonus 506 3.2 447 3.4 13.2 Overseas travel expenses 86 0.6 94 0.7 (8.5) Brand building and marketing expenses 70 0.5 94 0.7 (25.5) Commission charges 14 0.1 24 0.2 (41.7) Professional charges 18 0.1 23 0.2 (21.7) Others 36 0.2 37 0.3 (2.7) Total 730 4.7 719 5.5 1.5 Employee costs consist of salaries paid to sales and marketing employees and include bonus payments. The number of sales and marketing personnel increased from 486 as of March 31, 2007 to 543 as of March 31, 2008. Brand building expenses include expenses incurred for participation in various seminars and exhibitions, both in India and abroad, various sales and marketing events organized by us, and other promotional expenses incurred on advertisement and sales. We added 170 new customers as compared to 160 during the previous year. Commission charges primarily consist of expenses incurred by Finacle® with regard to agents’ fees paid for sourcing business from international markets. It also includes commission paid for software service revenues derived from overseas markets. Professional charges primarily relate to payments made to PR agencies, legal charges, translation charges, etc.

2.4 General and administration expenses We incurred general and administration expenses amounting to 6.9% of our total revenues, compared to 7.1% during the previous year. in Rs. crore

Revenues General and administration expenses Salaries and bonus Professional charges Telephone charges Office maintenance Power and fuel Travel and conveyance Repairs to building, plant and machinery Rent Provision for bad and doubtful debts Others Total

2008

%

2007

% Growth % 15,648 100.0 13,149 100.0 19.0

233 167 117 120 106 92

1.5 1.1 0.7 0.8 0.7 0.6

183 137 106 95 88 85

1.4 1.0 0.8 0.7 0.7 0.7

27.3 21.9 10.4 26.3 20.5 8.3

40 15

0.2 0.1

38 14

0.3 0.1

5.3 7.1

42 147 1,079

0.3 0.9 6.9

24 157 927

0.2 1.2 7.1

0.8 (6.4) 16.4

Employee costs increased as the number of administration personnel increased from 2,408 as of March 31, 2007 to 2,691 as of March 31, 2008. Professional charges increased due to increased use of service providers. These charges include fees paid for availing services such as tax consultancy, US GAAP audit, SOX consultancy, recruitment and training, and legal charges. Expenses on telephone charges, office maintenance, power and fuel, travel and conveyance, repairs to buildings, plant and machinery, and rent increased due to increased business activity. Other expenses (a grouping of many expenses) have reduced to Rs. 147 crore (0.9% of revenue) for the year ended March 31, 2008 from Rs. 157 crore (1.2% of revenue) in the previous year.

3. Operating profits We earned an operating profit (PBIDTA) of Rs. 4,963 crore, representing 31.7% of total revenues compared to Rs. 4,225 crore, representing 32.1% of total revenues, during the previous year.

4. Interest No interest expense was incurred during the year ended March 31, 2008 and 2007 as we continued to be debt-free.

5. Depreciation We provided Rs. 546 crore and Rs. 469 crore toward depreciation for the years ended March 31, 2008 and 2007, representing 3.5% and 3.6% of total revenues. The depreciation for the years ended March 31, 2008 and 2007 includes an amount of Rs. 16 crore and Rs. 26 crore, toward 100% depreciation on assets costing less than Rs. 5,000 each. The depreciation as a percentage of average gross block (excluding land) is 13.7% and 14.6% for the years ended March 31, 2008 and 2007.

6. Other income, net The details of other income for fiscal 2008 and 2007 are given below: in Rs. crore

Interest – bank deposits and others Dividends from mutual funds Miscellaneous income Exchange differences Total

2008 650 4 24 5 683

2007 182 116 35 42 375

Our treasury policy allows us to invest in short-term funds with maturity up to 365 days, of certain size with a limit on individual funds. The average yield on investible surplus calculated on monthly average is given below: in %

Average yield Deposits* Mutual funds Total – Deposits and mutual funds *

2008 9.5 7.9 9.5

2007 8.8 6.1 7.4

Subject to tax

We use foreign exchange forward contracts and options to hedge our exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts and options reduces the risk or cost to us. We do not use the foreign exchange forward contracts or options for trading or speculation purposes. Pursuant to the Institute of Chartered Accountants of India (ICAI) announcement “Accounting for Derivatives” on the early adoption of Accounting Standard AS 30 “Financial Instruments: Recognition and measurement”, we have early adopted the standard for the year under review, to the extent that the adoption does not conflict with the existing mandatory accounting standards and other authoritative pronouncements, companies law and regulatory requirements.

The details of foreign exchange gain / (losses) are as follows: in Rs. crore

2008

2007

Transaction and translation losses

(98)

(21)

Option / forward contracts – gains / (losses) Net

103 5

63 42

The composition of currency wise revenues for fiscal 2008 and 2007 are given below: Currency 2008 (%) 2007 (%) US Dollar (US $) 70.7 73.7 UK Pound (GBP) 14.1 11.6 Euro (EUR) 5.7 4.9 Australian Dollar (AUD) 4.6 4.9 Others 4.9 4.9 Total 100.0 100.0 The average and period-end rates for various currencies are given below: Average rate – FY 08 – FY 07 Depreciation / (appreciation) Period end rate – FY 08 – FY 07 Depreciation / (appreciation)

US $ 40.00 45.06 (11.2%) 40.02 43.10 (7.1%)

GBP EUR 80.52 57.24 86.00 58.29 (6.4%) (1.8%) 79.46 63.25 84.84 57.64 (6.3%) 9.7%

AUD 35.01 34.73 0.8% 36.55 34.93 4.6%

The details of outstanding option / forward contracts as of March 31, 2008 is given below: Derivatives Forward contracts Option contracts Range barrier Euro accelerator Euro forward Total

US $ (Mn) Rs. crore EUR (Mn) 521 2,085 10 100 – – 621

400 – – 2,485

Rs. crore 63

– 12 5 27

– 76 32 171

7. Sensitivity to rupee movement Every 1% movement in the Rupee against the US Dollar has an impact of approximately 50 basis points on operating margins.

8. Provision for tax We have provided for our tax liability both in India and overseas. Pursuant to the amendments in the Indian Income tax Act, 1961, we have calculated our tax liability after considering Minimum Alternate Tax (MAT). The MAT liability can be carried forward and set off against the future tax liabilities. The profits attributable to operations under the Software Technology Park (STP) Scheme, are exempted from income tax for a consecutive period of 10 years from the financial year in which the unit starts producing computer software, or March 31, 2009, whichever is earlier. On April 29, 2008, the Finance Minister of India announced that the Government of India proposed to extend the availability of the 10 year tax holiday by a period of one year such that the tax holiday will be available until the earlier of fiscal year 2010 or 10 years after the commencement of a company’s undertaking, although such extension is not yet effective.

Infosys Annual Report 2007-08

| 55

The details of the operationalization of various software development centers and the year up to which the deduction under the Software Technology Park Scheme is available, are provided here: Software Technology Park

Bangalore, Electronics City Mangalore Pune Bhubaneswar Chennai Bangalore, Phase I, Electronics City Bangalore, Phase II, Electronics City Pune, Hinjawadi Mysore Hyderabad Mohali Chennai, Sholinganallur Bhubaneswar, Konark Mangalore, Mangala Thiruvananthapuram

Year of commencement

Tax exemption

Tax provision for the year ended March 31, 2008 and 2007 includes a reversal of Rs. 121 crore and Rs. 125 crore respectively for liability no longer required for taxes payable in various overseas jurisdictions. The details of effective tax rates are provided in the table below: in %

FY 1995

claimed from FY 1997

available up to FY 2004

1996 1997 1997 1997

1999 1999 1999 1999

2005 2006 2006 2006

1999

1999

2008

2000 2000 2000 2000 2000

2000 2000 2000 2000 2000

2009 2009 2009 2009 2009

2001 2001 2001 2004

2001 2001 2001 2004

2009 2009 2009 2009

Details about SEZs During the financial year 2007-08, two more Special Economic Zones (SEZs) at Pune and Mangalore, with an approved area of about 77.82 acres and 309 acres respectively, commenced production. The SEZ units came into existence under the new Special Economic Zones Act, 2005 (‘the SEZ Act’). As per the SEZ Act, the unit will be eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits or gains for a further five years. Certain tax benefits are also available for a further five years, subject to the unit meeting defined conditions.

Effective tax rate As reported Excluding tax reversal

2008 12.4 14.7

2007 8.5 11.6

9. Net profit before exceptional items Our net profit, before exceptional items, grew by 18.3% to Rs. 4,470 crore for the year ended March 31, 2008 from Rs. 3,777 crore in the previous year. This represents 28.6% and 28.8% of total revenue. Excluding the tax reversals, the net profit before exceptional items grew by 19.1% to Rs. 4,349 crore and Rs. 3,652 crore for the years ended March 31, 2008 and 2007. This represents 27.8% of total revenue for the years ended March 31, 2008 and 2007.

10. Exceptional items There were no exceptional items during the year ended March 31, 2008. During the previous year, we received the balance amount of Rs. 5 crore on fulfillment of the Escrow obligations on the sale of shares in Yantra Corporation. Since the carrying value of the investment was nil, the entire proceeds of Rs. 5 crore (net of taxes, as applicable) had been recognized in the profit and loss account as an exceptional item. Further, we received Rs. 1 crore from CiDRA Corporation toward redemption of shares on recapitalization.

11. Net profit after exceptional items Our net profit, after exceptional items, grew by 18.2% to Rs. 4,470 crore (28.6% of revenues) from Rs. 3,783 crore (28.8% of revenues). Excluding the tax reversals, the net profit after exceptional items grew by 18.9% to Rs. 4,349 crore (27.8% of revenues) from Rs. 3,658 crore (27.8% of revenues).

12. Earnings Per Share (EPS) Our basic EPS before exceptional items grew by 15.4% during the year to Rs. 78.24 per share from Rs. 67.82 per share in the previous year.

Other fiscal benefits, including indirect tax waivers, are being extended for setting up, operating and maintaining the unit.

Our basic EPS after exceptional items grew by 15.2% during the year to Rs. 78.24 per share from Rs. 67.93 per share in the previous year.

The details of the operationalization of various software development centers and the year up to which the deduction under the SEZ Scheme is available, are provided below:

Excluding the tax reversals, the basic EPS before exceptional items grew by 16.1% to Rs. 76.12 per share from Rs. 65.58 per share for the years ended March 31, 2008 and 2007.

Software Technology Year of Park commencement Chennai, Mahindra City FY 2006 Chandigarh 2007 Mangalore 2008 Pune 2008

Claimed from FY 2006 2007 2008 2008

Available up to FY 2020 2021 2022 2022

For the current year, approximately 90% of our revenues came from STP operations, 6% of revenues came from SEZ operations and 4% of our revenues are subjective full tax in India. We pay taxes in various countries, in which we operate, on the income that is sourced to those countries. The details of provision for taxes are as follows: in Rs. crore

Overseas tax Domestic tax Mat credit Deferred taxes

56 |

Power of talent

2008 305 514 819 (169) (20) 630

2007 205 170 375 – (23) 352

The outstanding shares used in computing basic EPS increased from 55,68,52,339 for the year ended March 31, 2007 to 57,13,98,340 for the year ended March 31, 2008, a dilution of 2.6%. The dilution was primarily on account of exercise of shares issued under the ESOP schemes. Details of diluted EPS are provided elsewhere in this report.

13. Segmental profitability Our operations predominantly relate to providing end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers. The income and operating income by industry and geographical segments are provided in this section.

Industry segments in Rs. crore

Financial Manufac- Telecom Retail Others services turing

Segmental revenues 2008 5,706 2,291 2007 4,951 1,805 Growth % 15.3 26.9 Segmental operating income 2008 1,856 691 2007 1,568 584 Growth % 18.4 18.3 Segmental operating profit (%) 2008 32.5 30.2 2007 31.7 32.4

Total

3,215 1,945 2,491 15,648 2,409 1,386 2,598 13,149 33.5 40.3 (4.1) 19.0 1,010 788 28.2

624 450 38.7

782 835 (6.3)

4,963 4,225 17.5

31.4 32.7

32.1 32.5

31.4 32.1

31.7 32.1

Geographical segments

in Rs. crore

North America

Europe

Segmental revenues 2008 9,873 4,207 2007 8,395 3,393 Growth % 17.6 24.0 Segmental operating income 2008 3,099 1,489 2007 2,649 1,226 Growth % 17.0 21.5 Segmental operating profit (%) 2008 31.4 35.4 2007 31.6 36.1

India

Rest of the world

Total

219 214 2.3

1,349 1,147 17.6

15,648 13,149 19.0

117 108 8.3

258 242 6.6

4,963 4,225 17.5

53.4 50.5

19.1 21.1

31.7 32.1

14. Liquidity Our growth has been financed largely through cash generated from operations, and to a lesser extent, from the proceeds of equity issues. in Rs. crore

Liquidity Cash and cash equivalents Net increase in cash and cash equivalents Current assets Net current assets Cash flows Operating Investing Financing Capital expenditure Investment in subsidiaries Dividends including dividend tax

Our current financial policy is to pay dividends up to 20% of net profits. The Board has decided to increase the dividend payout ratio to up to 30% of net profits, effective fiscal 2009. Our payout ratios during the year ended March 31, 2008, 2007 and 2006 were 19.8%, 19.9% and 19.4% respectively. In addition, a special dividend of Rs. 1,144 crore was declared (Rs. 1,338 crore including dividend tax) during the financial year ended March 31, 2008, which is subject to approval by shareholders in the ensuing AGM.

15. Stock option plans 1998 Employee Stock Option Plan (1998 Plan) Pursuant to the resolutions approved by the shareholders in the Extraordinary General Meeting held on January 6, 1999, we put in place an ADS-linked stock option plan termed as the “1998 Stock Option Plan”. The compensation committee of the Board administers the 1998 plan. The Government of India has approved the 1998 Plan, subject to a limit of 1,17,60,000 equity shares of par value of Rs. 5/each, representing 1,17,60,000 ADSs to be issued under the plan. The plan is effective for a period of 10 years from the date of its adoption by the Board. The details of the grants made and options forfeited & expired (adjusted for stock-split, as applicable) under the 1998 Plan are provided below:

January 2008 February March

Note: No options were granted during fiscal 2008.

During the year, 5,00,465 options issued under the 1998 Plan were exercised, and the remaining ADS options unexercised and outstanding as at March 31, 2008 were 15,30,447 (equivalent to 15,30,447 equity shares). Vested ADSs as of March 31, 2008 were 15,30,447 (equivalent to 15,30,447 equity shares). Details of the number of options granted and exercised under the 1998 Plan are given below:

2008

2007

Fiscal

7,689

5,610

2,079 12,227 8,496

1,856 8,961 7,137

3,816 (978) (777) 1,370 127 835

3,267 (1,091) (316) 1,443 635 1,532

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Our policy is to earn a minimum return of twice the cost of capital on average capital employed, and thrice the cost of capital on average invested capital. The current estimated cost of capital is 13.3%. At present, we earn 41.4% on average capital employed and 71.1% on average invested capital. We aim to maintain adequate cash balances to meet our strategic objectives while earning adequate returns. Our treasury policy calls for investing only in highly rated banks, financial institutions and companies for maturities up to 365 days with a limit for individual entities and also liquid mutual funds.

Options forfeited & expired Employees (No.) ADSs (No.) 7 13,280 42 37,180 2 2,752 51 53,212

Granted Employees Options (No.) (No.) 29 17,04,000 58 11,77,200 705 38,59,360 476 36,34,000 223 23,20,800 39 3,83,600 – – – – – – – – 1,530 1,30,78,960

Exercised Employees Options (No.) (No.) 32 – 5 95,200 – 49,736 – 2,23,864 120 3,58,160 309 10,35,480 562 11,71,600 531 13,71,404 1,263 22,91,213 234 5,00,465 3,056 70,97,122

1999 Employee Stock Option Plan (1999 Plan) The shareholders approved the 1999 Plan in June 1999, which provides for the issue of 5,28,00,000 equity shares to employees. The 1999 Plan is administered by the compensation committee of the Board. Under the 1999 Plan, options were issued to employees at an exercise price not less than the fair market value, i.e. the closing price of the Company’s shares on the stock exchange where there is the highest trading volume on the date of grant and, if the shares are not traded on that day, the closing price on the next trading day. Options under this plan may be granted to employees at less than the fair market value only if specifically approved by the members of the Company in a general meeting.

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The details of the grants made and forfeited & expired (adjusted for stock-split, as applicable) under the 1999 Plan are provided below: Options forfeited & expired Employees Options (No.) (No.) 3 11,350 6 3,225 4 20,370 7 21,899 3 7,091 1 2,687 7 3,703 1 526 1 248 105 34,777 13 8,173 10 3,667 161 1,17,716

April 2007 May June July August September October November December January 2008 February March

Note: No options were granted during the fiscal 2008.

During the year, 2,85,431 options issued under the 1999 plan were exercised, and the remaining options unexercised and outstanding as at March 31, 2008 were 14,94,693. Vested options as at March 31, 2008 were 10,89,041 (includes 7,602 options granted to external directors). Details of the number of options granted and exercised under the 1999 Plan are given below: Fiscal 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Granted Employees Options (No.) (No.)

Exercised Employees Options (No.) (No.)

1,124 81,16,000 8,206 1,56,62,640 5,862 1,64,04,000 3,008 49,34,800 595 15,42,400 – – – – 288 6,38,761 – – 19,083 4,72,98,601

22 – – 9,600 – 240 296 97,424 2,651 21,48,344 10,581 68,41,050 16,269 85,97,458 30,795 1,78,08,689 710 2,85,431 61,324 3,57,88,236

Note: Count of employees does not include exercises made by external directors.

The options movement under both the 1998 and 1999 Stock Option Plans as of March 31, 2008 are as follows: Granted Exercised Forfeited Outstanding Vested

Options (No.) – 7,85,896 1,70,928 30,25,140 26,19,488

Employee stock compensation under SFAS 123 Statement of Financial Accounting Standards 123 (SFAS 123), Accounting for Stock Based Compensation under US GAAP, requires the pro forma disclosure of the impact of the fair value method of accounting for employee stock valuation in the financial statements. The fair value of a stock option is determined using an option-pricing model that takes into account the stock price at the grant date, the exercise price, the expected life of the option, the volatility of the underlying stock and the expected dividends on it, and the risk-free interest rate over the expected life of the option. Applying the fair value based method as defined in SFAS 123, the impact on the reported net profit and basic earnings per share would be as follows:

in Rs. crore, except per share data

Net profit before exceptional items As reported Adjusted pro forma Basic EPS As reported Adjusted pro forma

2008

2007

4,470 4,457

3,777 3,765

78.24 78.01

67.82 67.61

16. Reconciliation of Indian and US GAAP financial statements There are differences between the US GAAP and the Indian GAAP financial statements. The reconciliation of profits as per the Indian and the US GAAP financial statements is given below: in Rs. crore

Indian GAAP - stand-alone Profits of subsidiary companies Minority interest Indian GAAP - consolidated Amortization of intangibles Fringe Benefit Tax Stock compensation expenses US GAAP net income US GAAP net income (USD million)

2008 4,470 189 – 4,659 (29) (2) (13) 4,615 1,155

2007 3,783 83 (10) 3,856 (17) – (24) 3,815 850

Subsidiary companies US GAAP requires presentation of financial statements on a consolidated basis. We have 10 subsidiaries as on March 31, 2008, namely Infosys Technologies (Australia) Pty. Limited, Infosys Technologies (China) Co. Limited, Infosys Consulting, Inc., Infosys Technologies S. de R. L. de C. V. Mexico, Infosys BPO Limited and its subsidiaries, namely Infosys BPO S.R.O, Pan Financials Shared Services India P. Ltd., P-Financial Services Holding B.V, Infosys BPO (Poland Sp. Z.o.o.) and Infosys BPO (Thailand) Limited.

Amortization of intangibles US GAAP requires the purchase price in business combination transactions to be allocated to identifiable assets and liabilities, including intangible assets. Intangible assets are to be amortized over the estimated useful life. The amortization relates to that of an intangible asset identified in allocation of the purchase price of Infosys BPO Limited and Pan Financial Shared Services.

Stock compensation expenses US GAAP requires upon adoption of SFAS 123(R) effective from April 1, 2007, stock compensation expenses to be recorded based on the grant date fair value of the option over its vesting term. The fair value of a stock option is determined using an option-pricing model that takes into account the stock price at the grant date, the exercise price, the expected life of the option, the volatility of the underlying stock and the expected dividends on it, and the risk-free interest rate over the expected life of the option.

Fringe benefit tax (FBT) US GAAP requires the payment of FBT to be accounted as an expense while at the same time accounting the recovery from the employee as an adjustment to the exercise price and hence credit to equity. Whereas, under Indian GAAP the recovery is credited to the profit and loss account.

17. Related party transactions These have been discussed in detail in the notes to the Indian GAAP financial statements in this report.

18. Events occurring after the balance sheet date There were no significant events occurring after the balance sheet date.

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19. Ratio analysis Ratios – Financial performance Export revenue / total revenue (%) Domestic revenue / total revenue (%) Software development expenses / total revenue (%) Gross profit / total revenue (%) Selling and marketing expenses / total revenue (%) General and administration expenses / total revenue (%) SG&A expenses / total revenue (%) Aggregate employee costs / total revenue (%) Operating profit / total revenue (%) Depreciation / total revenue (%) Operating profit after depreciation and interest / total revenue (%) Other income / total revenue (%) Provision for investments / total revenue (%) Profit before tax and exceptional items / total revenue (%) Tax / total revenue (%) Effective tax rate – Tax / PBT (%) Effective tax rate excluding tax reversals – Tax / PBT (%) PAT before exceptional items / total revenue (%) PAT after exceptional items / total revenue (%) PAT after exceptional items and excluding tax reversal / total revenue (%) Ratios – Balance sheet Debt-equity ratio Current ratio Days Sales Outstanding (DSO) Cash and equivalents / total assets (%) (1) Cash and equivalents / total revenue (%) (1) Capital expenditure / total revenue (%) Operating cash flows / total revenue (%) Depreciation / average gross block (%) Technology investment / total revenue (%) Ratios – Return PAT before exceptional items / average net worth (%) ROCE (PBIT / average capital employed) (%) Return on average invested capital (%) (1) Capital output ratio Invested capital output ratio (1) Value added / total revenue (%) Enterprise-value / total revenue (x) Dividend / adjusted public offer price (%) (3) Market price / adjusted public offer price (%) Ratios – Growth Overseas revenue (%) Total revenue (%) Operating profit (%) Net profit (before exceptional items) (%) Net profit (before exceptional items and excluding tax reversal) (%) Net profit (after exceptional items) (%) Basic EPS (before exceptional items) (%) Basic EPS (before exceptional items and tax reversal) (%) Basic EPS (after exceptional items) (%) Ratios – Per share Basic EPS (before exceptional items) (Rs.) Basic EPS (before exceptional items and tax reversal) (Rs.) Basic EPS (after exceptional items) (Rs.) Basic cash EPS (before exceptional items) (Rs.) Basic cash EPS (after exceptional items) (Rs.) Price / earning, end of year (2) Price / cash earnings, end of year (2) PE / EPS growth (2) Book value (Rs.) Price / book value, end of year Dividend per share (3) Dividend (%) (3) Dividend payout (%) (3) Market capitalization / total revenue, end of year (x)

2008

2007

2006

98.60 1.40 56.72 43.28 4.67 6.90 11.57 49.89 31.72 3.49 28.23 4.36 – 32.59 4.03 12.35 14.73 28.57 28.57 27.79

98.40 1.60 55.35 44.65 5.47 7.05 12.52 48.02 32.13 3.57 28.56 2.85 0.02 31.40 2.68 8.53 11.55 28.72 28.77 27.82

98.18 1.82 54.13 45.87 5.53 7.23 12.76 47.29 33.12 4.53 28.58 1.59 – 30.17 3.36 11.12 11.78 26.82 26.82 26.62

– 3.28 72 57.00 49.14 8.76 24.39 13.00 2.57

– 4.91 64 50.26 42.66 10.97 24.85 13.95 3.36

– 2.73 61 64.71 49.44 11.61 25.58 16.30 3.69

36.26 41.38 71.12 1.27 2.76 85.97 4.76 1,785 1,94,008

41.83 45.73 88.81 1.46 3.29 80.71 8.34 1,549 2,71,987

39.89 44.89 93.96 1.49 3.74 80.79 8.61 1,011 2,00,852

19.28 19.01 17.47 18.35 19.09 18.16 15.36 16.07 15.18

45.97 45.65 41.35 56.01 51.98 56.25 52.95 49.01 53.20

31.79 31.60 28.56 30.23 29.26 27.15 28.02 27.09 24.98

78.24 76.12 78.24 87.80 87.80 18.40 16.40 1.20 235.84 6.11 13.25 265 19.83 5.26

67.82 65.58 67.93 76.24 76.35 29.76 26.48 0.56 195.41 10.33 11.50 230 19.85 8.77

44.33 44.01 44.33 51.83 51.83 33.62 28.76 1.20 125.15 11.91 7.50 150 19.36 9.10

Note: (1) Investments in liquid mutual funds, have been considered as cash and cash equivalents for the purpose of the above ratio analysis. (2) Before exceptional items. (3) Dividend ratios exclude Silver Jubilee Dividend for fiscal 2006 and Special Dividend for fiscal 2008.

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D. Opportunities and threats We believe our competitive strengths include: Leadership in sophisticated solutions that enable clients to optimize the efficiency of their business: We bring together our expertise in consulting, IT services and business process outsourcing to create solutions that allow our clients to increase their customer loyalty through faster innovation, restructure their cost base, and help them achieve greater success through shifting business cycles. Our expertise helps our clients improve their own efficiencies, create better value for their end customers and become more competitive. Our suite of comprehensive, end-to-end technology-based solutions enables us to extend our network of relationships, broaden our dialogue with key decision-makers on the client’s site, increase the points of sale for new clients and diversify our service-mix. As a result, we are able to capture a greater share of our clients’ technology budgets. Our suite of solutions encompasses consulting, design, development, product re-engineering, maintenance, systems integration and package evaluation and implementation, and business process management services from Infosys BPO. Through our consulting group and SETLabs, we research and engineer new solutions tailored for our clients and their respective industries. More recently, with the creation of Infosys Consulting, we have enhanced our ability to provide strategic and competitive analysis and complex operational consulting services. We have a well-defined methodology to update and extend our service offerings to meet the evolving needs of the global marketplace. Proven global delivery model: We believe our highly evolved Global Delivery Model represents a key competitive advantage. Over the past decade, we have developed our onsite and offshore execution capabilities to deliver high quality and scalable services. In doing so, we have made substantial investments in our processes, infrastructure and systems, and have refined our Global Delivery Model to effectively integrate onsite and offshore technology services. Our Global Delivery Model provides clients with seamless, high quality solutions in reduced time frames enabling them to achieve operating efficiencies. To address changing industry dynamics, we continue to refine this model. Through our Modular Global Sourcing framework, we assist clients in segmenting their internal business processes and applications, including IT processes. We outsource these segments selectively on a modular basis to reduce risk and cost, and increase operational flexibility. We believe that this approach and other ongoing refinements to our Global Delivery Model help us retain our industry leadership position. We were named as one of the leaders in offshore application services in Europe and North America by a leading analyst firm. Commitment to superior quality and process execution: We have developed a sophisticated project management methodology to ensure timely, consistent and accurate delivery of superior quality solutions to maintain a high level of client satisfaction. We constantly benchmark our services and processes against globally recognized quality standards. Certifications we have received include SEI-CMMI Level 5, CMM Level 5, PCMM Level 5, TL 9000 and ISO 9001-2000. In February 2007, Infosys BPO was certified for eSCM level 4.0, the eSourcing Capability Model for Service Providers, developed by a consortium led by Carnegie Mellon University’s Information Technology Services Qualification Center. Strong Brand and Long-Standing Client Relationships: We have long-standing relationships with large multinational corporations built on successful prior engagements with them. Our track record of delivering high quality solutions across the entire software life cycle and our strong domain expertise help us solidify these relationships and gain increased business from our existing clients. As a result, we have a history of client retention and derive a significant proportion of revenues from repeat clients. Status as an employer of choice: We believe we have among the best talent in the Indian technology services industry and are committed to remaining among the industry’s leading employers. We have a presence in 13 cities in India, allowing us to recruit technology professionals with specific geographic preferences. We have a diverse workforce which includes employees from 70 nationalities. Our training programs ensure that new hires enhance their skills in alignment with our requirements and are readily deployable upon completion of their

training programs. Our lean organizational structure and strong unifying culture facilitate the sharing of knowledge and best practices among our employees. Ability to scale: We have successfully managed our growth by investing in infrastructure and by rapidly recruiting, training and deploying new professionals. We currently have 52 global development centers, the majority of which are located in India. We also have development centers in various countries including Australia, Canada, China, Japan, Mauritius, Mexico, Poland and at multiple locations in the United States and Europe. Our financial position allows us to make the investments in infrastructure and personnel, required to continue growing our business. We can rapidly deploy resources and execute new projects through the scalable network of our global delivery centers. Innovation and leadership: We are a pioneer in the technology services industry. We are one of the first Indian companies to achieve a number of significant milestones, which has enhanced our reputation in the marketplace. For example, we are one of the first companies to develop and deploy a Global Delivery Model and attain SEI-CMMI Level 5 certification for both our offshore and onsite operations. More recently, we established a business consulting practice in the United States which leverages our Global Delivery Model. In addition, we are the first Indian company to list on a US stock exchange. We are also the first Indian company to do a Public Offering Without Listing in Japan. In December 2006, we became the first Indian company to be added to the NASDAQ-100 index. Infosys is the first Indian company to be part of any of the major global indices.

Our strategy We seek to further strengthen our position as a leading global technology services company by successfully differentiating our service offerings and increasing the scale of our operations. To achieve these goals, we seek to: Increase business from existing and new clients: Our goal is to build enduring relationships with both existing and new clients. With existing clients, we aim to expand the nature and scope of our engagements by increasing the size and number of projects and extending the breadth of our service offerings. For new clients, we seek to provide valueadded solutions by leveraging our in-depth industry expertise and expanding the breadth of services offered to them beyond those in the initial engagement. We manage first-time engagements by educating clients about the offshore model, taking on smaller projects to minimize client risk and demonstrating our execution capabilities. We also plan to increase our recurring business with clients by providing software re-engineering, maintenance, infrastructure management and business process management services which are long-term in nature and require frequent client contact. Our Strategic Global Sourcing Group consists of senior professionals and has been established to identify, secure and manage new, large, and long-term client engagements. Expand geographically: We seek to selectively expand our global presence to enhance our ability to service clients. We plan to accomplish this by establishing new sales and marketing offices, representative offices and global development centers to expand our geographical reach. We intend to increase our presence in China through Infosys China, in the Czech Republic and Eastern Europe directly and through Infosys BPO, in Australia through Infosys Australia and in Latin America, through Infosys Mexico. We intend to use our operations in these regions to eventually support clients in the local market as well as our global clients. Invest in infrastructure and employees: We intend to continue to invest in physical and technological infrastructure to support our growing worldwide development and sales operations and to increase our productivity. To enhance our ability to hire and successfully deploy increasingly greater numbers of technology professionals, we will invest in recruitment and training, and maintain a rewarding work environment. During fiscal 2008, we screened over 8,85,000 employment applications, tested over 2,27,600 applicants, interviewed over 97,500 applicants and made approximately 46,300 offers of employment. These statistics do not include Infosys BPO or our other subsidiaries. We have also completed the construction of an employee training facility in Mysore, India to further enhance our employee training capabilities. The Mysore facility is able to house 4,800 trainees

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at any one time, and is able to provide the facilities required for the training of approximately 15,200 employees annually. Enhance our solution set: We seek to continually enhance our portfolio of solutions as a means of developing and growing our business. To differentiate our services, we focus on emerging trends, new technologies, specific industries and pervasive business issues that confront our clients. In recent years, we have added new service offerings, such as consulting, business process management, systems integration and infrastructure management, which are major contributors to our growth. We also established Infosys Consulting to add additional operational and business consulting capabilities to our Global Delivery Model. Furthermore, our Modular Global Sourcing framework and other refinements to our Global Delivery Model enhance our ability to service our customers. Develop deep industry knowledge: We continue to build specialized industry expertise in the financial services, manufacturing, telecommunications, retail, transportation and logistics industries. We combine deep industry knowledge with an understanding of our clients’ needs and technologies to provide high value, quality services. Our industry expertise can be leveraged to assist other clients in the same industry, thereby improving quality and reducing the cost of services to our clients. We will continue to build on our extensive industry expertise and enter into new industries. Enhance brand visibility: We continue to invest in the development of our premium brand identity in the marketplace. Our branding efforts include participating in media and industry analyst events, sponsorship of and participation in targeted industry conferences, trade shows, recruiting efforts, community outreach programs and investor relations. We have instituted the Wharton Infosys Business Transformation Award, offered jointly with the Wharton School at the University of Pennsylvania to recognize visionaries and Global 2000 organizations that use technology innovatively to transform their industries. We also instituted the ACM-Infosys Foundation Award jointly with the Association of Computing Machinery (ACM), for the recognition of young scientists and system developers whose contemporary innovations have an impact on the computing field. Additionally, we have instituted a Rs. 1 million Infosys Mathematics Award jointly with the National Institute of Advanced Studies in order to encourage research in mathematics and sciences. We believe that a strong and recognizable Infosys brand will continue to facilitate the new business lead generation process, and enhance our ability to attract talented personnel globally. Pursue alliances and strategic acquisitions: We plan to continue developing alliances that complement our core competencies. Our alliance strategy is targeted at partnering with leading technology providers, which allows us to take advantage of emerging technologies in a mutually beneficial and cost-competitive manner. We also intend to selectively pursue acquisitions that augment our existing skill sets, industry expertise, client base or geographical presence. In January 2004, we acquired Infosys Australia primarily due to its market position in Australia, skilled employees, management strength, expertise in the telecommunications industry and potential to serve as a platform for enhancing business opportunities in Australia.

Competition We operate in a highly competitive and rapidly changing market and compete with the following: • consulting firms such as Accenture, Atos Origin, Bearing Point, Capgemini and Deloitte Consulting • divisions of large multinational technology firms such as HP and IBM • IT outsourcing firms such as Computer Sciences Corporation, EDS, Keane, Logica CMG, and Perot Systems • offshore technology services firms such as Cognizant Technologies, Satyam Computer Services, Tata Consultancy Services and Wipro • software firms such as Oracle and SAP • business process outsourcing firms such as Genpact, HCL, and WNS; and • in-house IT departments of large corporations.

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In the future, we expect competition from firms establishing and building their offshore presence and firms in countries with lower personnel costs than those prevailing in India. However, we recognize that price alone cannot constitute sustainable competitive advantage. We believe that the principal competitive factors in our business include the ability to: • effectively integrate onsite and offshore execution capabilities to deliver seamless, scalable, cost-effective services • increase scale and breadth of service offerings to provide one-stop solutions • provide industry expertise to clients’ business solutions • attract and retain high quality technology professionals; and • maintain financial strength to make strategic investments in human resources and physical infrastructure through business cycles. We believe we compete favorably with respect to these factors.

E. Outlook, risks and concerns This section contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors. • Our revenues and expenses are difficult to predict and can vary significantly from period to period, which could cause our share price to decline • We may not be able to sustain our previous profit margins or levels of profitability • The economic environment, pricing pressure and rising wages in India and overseas could negatively impact our revenues and operating results • Our revenues are highly dependent on clients primarily located in the United States and Europe, as well as on clients concentrated in certain industries. Economic slowdowns or factors that affect the economic health of the United States, Europe or these industries may affect our business. • Any inability to manage our growth could disrupt our business and reduce our profitability • We may face difficulties in providing end-to-end business solutions for our clients, which could lead to clients discontinuing their work with us which, in turn, could harm our business • Intense competition in the market for technology services could affect our cost advantages, which could reduce our share of business from clients and decrease our revenues • Our revenues are highly dependent upon a small number of clients, and the loss of any one of our major clients could significantly impact our business • Legislation in certain of the countries, in which we operate, including the United States and the United Kingdom, may restrict companies in those countries from outsourcing work overseas • Our success depends largely upon our highly skilled technology professionals and our ability to hire, attract and retain these personnel • Our success depends in large part upon our management team and key personnel and our ability to attract and retain them • Our failure to complete fixed-price, fixed-time frame contracts within budget and on time may negatively affect our profitability • Our client contracts can typically be terminated without cause and with little or no notice or penalty, which could negatively impact our revenues and profitability • Our engagements with customers are singular in nature and do not necessarily provide for subsequent engagements • Our client contracts are often conditioned upon our performance, which, if unsatisfactory, could result in less revenue than previously anticipated • Some of our long-term client contracts contain benchmarking provisions which, if triggered, could result in lower future revenues and profitability under the contract

• Our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and the industries on which we focus • Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance • Disruptions in telecommunications, system failures, or virus attacks could harm our ability to execute our Global Delivery Model, which could result in client dissatisfaction and a reduction of our revenues • We may be liable to our clients for damages caused by disclosure of confidential information, system failures, errors or unsatisfactory performance of services • We are investing substantial cash assets in new facilities and physical infrastructure, and our profitability could be reduced if our business does not grow proportionately • We may be unable to recoup our investment costs to develop our software products • We may engage in acquisitions, strategic investments, strategic partnerships or alliances, or other ventures that may or may not be successful • Our earnings have been and will continue to be adversely affected by the change to our accounting policies with respect to the expensing of stock options • Our net income would decrease if the Government of India reduces or withdraws tax benefits and other incentives it provides to us or when our tax holidays expire or terminate • In the event that the Government of India or the government of another country changes its tax policies in a manner that is adverse to us, our tax expense may materially increase, reducing our profitability • Currency fluctuations may affect the results or our operations • We operate in jurisdictions that impose transfer pricing and other tax-related regulations on us, and any failure to comply could materially and adversely affect our profitability • Wage pressures in India may prevent us from sustaining our competitive advantage and may reduce our profit margins • Terrorist attacks or a war could adversely affect our business, results of operations and financial condition • The markets in which we operate are subject to the risk of earthquakes, floods and other natural disasters • Regional conflicts in South Asia could adversely affect the Indian economy, disrupt our operations and cause our business to suffer • Restrictions on immigration may affect our ability to compete for and provide services to clients in the United States, which could hamper our growth and cause our revenues to decline • Changes in the policies of the Government of India or political instability could delay the further liberalization of the Indian economy and adversely affect economic conditions in India, which could impact our business and prospects • Our international expansion plans subject us to risks inherent in doing business internationally The above risks have been dealt with in detail in our various filings with the U.S. Securities and Exchange Commission (SEC). The details are available on our website www.infosys.com.

F. Internal control systems and their adequacy The CEO and CFO certification provided in the report discusses the adequacy of our internal control systems and procedures.

G. Material developments in human resources / industrial relations front, including number of people employed In 2006, we were ranked as the best company to work for in India by the TNS-Mercer survey in Business Today. Our culture and reputation as a business leader in the technology services industry enables us to recruit and retain the best available talent in India.

Human capital Our professionals are our most important assets. We believe that the quality and level of service that our professionals deliver are among the highest in the global technology services industry. We are committed to remaining among the industry’s leading employers. The key elements that define our culture include:

Recruitment We have built our global talent pool by recruiting new students from premier universities, colleges and institutes in India and through need-based hiring of project leaders and middle managers. We typically recruit only those students in India who have consistently shown high levels of achievement. We have also begun selective recruitment at campuses in the United States, the United Kingdom, Australia and China. We rely on a rigorous selection process involving a series of aptitude tests and interviews to identify the best applicants. This selection process is continually assessed and refined, based on performance tracking of past recruits. Our reputation as a premier employer enables us to select from a large pool of qualified applicants. For example, in fiscal 2008, we received over 8,85,000 applications, tested over 2,27,500 applicants, interviewed over 97,600 applicants and extended job offers to approximately 46,300 applicants. In fiscal 2008, we added approximately 13,600 new employees, net of attrition. These statistics do not include Infosys BPO, which recruited approximately 5,300 new hires, net of attrition, during fiscal 2008, or any of our other wholly owned subsidiaries.

Training and Development Our training, continuing education and career development programs are designed to ensure that our technology professionals enhance their skill-sets in alignment with their respective roles. Most new student hires complete approximately 14 weeks of integrated on-the-job training prior to being assigned to business units. We continually provide our technology professionals with challenging assignments and exposure to new skills, technologies and global opportunities. As of March 31, 2008, we employed 338 full-time employees as faculty members, including 143 with doctorate or masters degrees. Our faculty conducts integrated training for our new employees. We also have our employees undergo certification programs each year to develop the skills relevant for their roles. Leadership development is a core part of our training program. We established the Infosys Leadership Institute on a 336 acre campus in Mysore, India to enhance leadership skills that are required to manage the complexities of the rapidly changing marketplace. We provide a challenging, entrepreneurial and empowering work environment that rewards dedication and a strong work ethic. In addition, we also have been working with several colleges across India through our Campus Connect program, enabling their faculty to provide industry-related training to students at the colleges.

Compensation Our technology professionals receive competitive salaries and benefits, and are eligible to participate in our stock option plans. We have also adopted a performance-linked compensation program that links compensation to individual performance, as well as our performance.

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Auditors’ report We have audited the attached Balance Sheet of Infosys Technologies Limited (‘the Company’) as at 31 March 2008, the Profit and Loss Account of the Company and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003 (‘the Order’), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (‘the Act’), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; (e) on the basis of written representations received from the directors, as at March 31, 2008, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2008 from being appointed as a director in terms of Section 274(1)(g) of the Act; (f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2008; (ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. for BSR & Co. Chartered Accountants

Natrajan Ramkrishna Bangalore April 15, 2008

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Partner Membership No: 32815

Annexure to the auditors’ report The Annexure referred to in the Auditors’ report to the members of Infosys Technologies Limited (‘the Company’) for the year ended 31 March 2008. We report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. (c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption. (ii)

The Company is a service company, primarily rendering information technology services. Accordingly it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) The Company has granted a loan to Infosys China, a wholly- owned subsidiary, being a body corporate covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year and the year-end balance of such loan amounted to Rs. 32,01,60,000. (b) In our opinion, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. (c) In the case of loan granted to the body corporate listed in the register maintained under Section 301, the borrowers have been regular in repaying the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and are repayable on demand. Accordingly, paragraph 4 (iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount. (d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to a body corporate listed in the register maintained under Section 301 of the Companies Act, 1956. (e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraph 4 (iii) (e) to 4 (iii) (g) of the Order is not applicable. (iv)

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v) (a) above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. (vi)

The Company has not accepted any deposits from the public. Accordingly, paragraph 4(vi) of the Order is not applicable.

(vii)

In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

(viii)

The Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for any of the services rendered by the Company. Accordingly, paragraph 4(viii) of the Order is not applicable.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees’ State Insurance, Customs duty and Excise duty. There were no dues on account of cess under Section 441A of the Companies Act, 1956 since the aforesaid section has not yet been made effective by the Central Government. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income-tax, Salestax, Wealth tax, Service tax and other material statutory dues were in arrears as at 31 March 2008 for a period of more than six months from the date they became payable.

(xiii)

In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/ society. Accordingly, paragraph 4(xiii) of the Order is not applicable.

(xiv)

According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, paragraph 4(xiv) of the Order is not applicable.

(xv)

According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, paragraph 4(xv) of the Order is not applicable.

(xvi)

The Company did not have any term loans outstanding during the year. Accordingly, paragraph 4(xvi) of the Order is not applicable.

(xvii) The Company has not raised any funds on short-term basis. Accordingly, paragraph 4(xvii) of the Order is not applicable. (xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraph 4(xviii) of the Order is not applicable. (xix)

The Company did not have any outstanding debentures during the year. Accordingly, paragraph 4(xix) of the Order is not applicable.

(xx)

The Company has not raised any money by public issues during the year. Accordingly, paragraph 4(xx) of the Order is not applicable.

(xxi)

According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. for BSR & Co. Chartered Accountants

(b) According to the information and explanations given to us, the following due has not been deposited by the Company on account of dispute:

Natrajan Ramkrishna Partner

Name of the Statute: Central sales tax, 1956

Membership No: 32815

Nature of the dues: Additional sales tax on implementation charges and expense reimbursement towards Finacle.

Bangalore

Amount (Rs. in lakhs.): 67.70

April 15, 2008

Period to which the amount relates: Financial year 2006-07 Forum where dispute is pending: Appellate Deputy Commissioner (CT), Hyderabad

In addition, according to the information and explanations given to us, there are no dues of Income tax, Wealth tax, Service tax and cess which have not been deposited with the appropriate authorities on account of any dispute.

(x)

The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. Accordingly, paragraph 4(x) of the Order is not applicable.

(xi)

The Company did not have any outstanding dues to any financial institution, banks or debentureholders during the year. Accordingly, paragraph 4(xi) of the Order is not applicable.

(xii)

The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, paragraph 4(xii) of the Order is not applicable.

Infosys Annual Report 2007-08

| 65

Balance sheet As at March 31, in Rs. crore

Schedule

2008

2007

1 2

286 13,204 13,490

286 10,876 11,162

4,508 1,837 2,671 1,260 3,931 964 99

3,889 1,739 2,150 957 3,107 839 79

6 7 8

3,093 6,429 2,705 12,227

2,292 5,470 1,199 8,961

LESS: CURRENT LIABILITIES AND PROVISIONS Current liabilities Provisions NET CURRENT ASSETS

9 10

1,483 2,248 8,496 13,490

1,162 662 7,137 11,162

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

23

SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share capital Reserves and surplus APPLICATION OF FUNDS FIXED ASSETS Original cost Less: Accumulated depreciation Net book value Add: Capital work-in-progress

3

INVESTMENTS DEFERRED TAX ASSETS CURRENT ASSETS, LOANS AND ADVANCES Sundry debtors Cash and bank balances Loans and advances

4 5

Note: The schedules referred to above are an integral part of the balance sheet As per our report attached

for BSR & Co. Chartered Accountants

Natrajan Ramkrishna

N. R. Narayana Murthy

Nandan M. Nilekani

S. Gopalakrishnan

S. D. Shibulal

Partner Membership No. 32815

Chairman and Chief Mentor

Co-Chairman

Chief Executive Officer and Managing Director

Chief Operating Officer

Deepak M. Satwalekar

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami

Rama Bijapurkar

Director

Director

Director

Director

Claude Smadja

Sridar A. Iyengar

David L. Boyles

Prof. Jeffrey S. Lehman

Director

Director

Director

Director

K. Dinesh

T. V. Mohandas Pai

Srinath Batni

V. Balakrishnan

Director

Director

Director

Chief Financial Officer

Bangalore

K. Parvatheesam

April 15, 2008

Company Secretary

66 |

Power of talent

Profit and loss account For the year ended March 31, in Rs. crore, except per share data

Schedule Income from software services and products Software development expenses GROSS PROFIT Selling and marketing expenses General and administration expenses

2008 15,648 8,876 6,772 730 1,079 1,809 4,963 – 546 4,417 683 – 5,100 630 4,470 – 4,470 4,844 – – 4,844 9,314

2007 13,149 7,278 5,871 719 927 1,646 4,225 – 469 3,756 375 2 4,129 352 3,777 6 3,783 2,195 4 1 2,190 5,973

343 415 1,144 1,902 323 447 6,642 9,314

278 371 – 649 102 378 4,844 5,973

78.24 77.98

67.82 66.33

78.24 77.98

67.93 66.44

57,13,98,340 57,33,06,887

55,68,52,339 56,93,42,694

11 12 13

OPERATING PROFIT BEFORE INTEREST AND DEPRECIATION Interest Depreciation OPERATING PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS Other income, net Provision for investments NET PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS Provision for taxation (refer Note 23.2.12) NET PROFIT AFTER TAX BEFORE EXCEPTIONAL ITEMS Income on sale of investments, net of taxes (refer Note 23.2.22) NET PROFIT AFTER TAX AND EXCEPTIONAL ITEMS Balance brought forward Less: Residual dividend paid Dividend tax on the above

14

15

AMOUNT AVAILABLE FOR APPROPRIATION Dividend Interim Final Special dividend Total dividend Dividend tax Amount transferred to general reserve Balance in profit and loss account EARNINGS PER SHARE* Equity shares of par value Rs. 5/- each Before exceptional items Basic Diluted After exceptional items Basic Diluted Number of shares used in computing earnings per share Basic Diluted SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

23

Note: *Refer Note 23.2.20 The schedules referred to above are an integral part of the profit and loss account As per our report attached

for BSR & Co. Chartered Accountants

Natrajan Ramkrishna

N. R. Narayana Murthy

Nandan M. Nilekani

S. Gopalakrishnan

S. D. Shibulal

Partner Membership No. 32815

Chairman and Chief Mentor

Co-Chairman

Chief Executive Officer and Managing Director

Chief Operating Officer

Deepak M. Satwalekar

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami

Rama Bijapurkar

Director

Director

Director

Director

Claude Smadja

Sridar A. Iyengar

David L. Boyles

Prof. Jeffrey S. Lehman

Director

Director

Director

Director

K. Dinesh

T. V. Mohandas Pai

Srinath Batni

V. Balakrishnan

Director

Director

Director

Chief Financial Officer

Bangalore

K. Parvatheesam

April 15, 2008

Company Secretary

Infosys Annual Report 2007-08

| 67

Cash flow statement For the year ended March 31, in Rs. crore

Schedule CASH FLOWS FROM OPERATING ACTIVITIES Net profit before tax and exceptional items Adjustments to reconcile net profit before tax to cash provided by operating activities (Profit) / loss on sale of fixed assets Depreciation Interest and dividend income Profit on sale of liquid mutual funds Provision for investments Effect of exchange differences on translation of foreign currency cash and cash equivalents Changes in current assets and liabilities Sundry debtors Loans and advances Current liabilities and provisions Income taxes paid NET CASH GENERATED BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets and change in capital work-in-progress Payment for Intellectual Property Rights (refer Note 23.2.21) Investment in subsidiaries (refer Note 23.2.16) Investments in securities (refer Note 23.2.16) Interest and dividend received Cash flow from investing activities before exceptional items Proceeds on sale of long-term investments (net of taxes) (refer Note 23.2.22) NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of share capital on exercise of stock options Dividends paid during the period Dividend tax paid during the period NET CASH USED IN FINANCING ACTIVITIES Effect of exchange differences on translation of foreign currency cash and cash equivalents NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

16 17 18

19

20 22

21 23

2008

2007

5,100

4,129

– 546 (654) – –

– 469 (298) (11) 2

(18)

4

(801) (186) 312 (483) 3,816

(774) (180) 347 (421) 3,267

(1,370) – (127) – 519 (978) – (978)

(1,443) 14 (635) 695 272 (1,097) 6 (1,091)

58 (714) (121) (777)

1,216 (1,343) (189) (316)

18 2,079 5,610 7,689

(4) 1,856 3,754 5,610

Note: The schedules referred to above are an integral part of the cash flow statement As per our report attached

for BSR & Co. Chartered Accountants

Natrajan Ramkrishna

N. R. Narayana Murthy

Nandan M. Nilekani

S. Gopalakrishnan

S. D. Shibulal

Partner Membership No. 32815

Chairman and Chief Mentor

Co-Chairman

Chief Executive Officer and Managing Director

Chief Operating Officer

Deepak M. Satwalekar

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami

Rama Bijapurkar

Director

Director

Director

Director

Claude Smadja

Sridar A. Iyengar

David L. Boyles

Prof. Jeffrey S. Lehman

Director

Director

Director

Director

K. Dinesh

T. V. Mohandas Pai

Srinath Batni

V. Balakrishnan

Director

Director

Director

Chief Financial Officer

Bangalore

K. Parvatheesam

April 15, 2008

Company Secretary

68 |

Power of talent

Schedules to the balance sheet in Rs. crore, except as otherwise stated

in Rs. crore, except as otherwise stated

As at March 31, 1. SHARE CAPITAL Authorized Equity shares, Rs. 5/- par value 60,00,00,000 (60,00,00,000) equity shares Issued, subscribed and paid up Equity shares, Rs. 5/- par value* 57,19,95,758 (57,12,09,862) equity shares fully paid up [Of the above, 53,53,35,478 (53,53,35,478) equity shares, fully paid up, have been issued as bonus shares by capitalization of the general reserve]

2008

2007

300

300

286

286

286

As at March 31, 4. INVESTMENTS Trade (unquoted) – at cost Long-term investments In subsidiaries Infosys BPO Ltd.** 3,38,22,319 (3,34,61,902) equity shares of Rs. 10/- each, fully paid Infosys Technologies (China) Co. Limited Infosys Technologies (Australia) Pty. Limited 1,01,08,869 (1,01,08,869) equity shares of A$0.11 par value, fully paid Infosys Consulting, Inc., USA 4,00,00,000 (2,00,00,000) common stock of US $1.00 par value, fully paid Infosys Technologies S. de R.L. de C.V., Mexico

286

Forfeited shares amounted to Rs. 1,500/- (Rs. 1,500/-) For details of options in respect of equity shares, refer Note 23.2.11 * Also refer Note 23.2.20 for details of basic and diluted shares *

2.

In other investments* Less: Provision for investments

RESERVES AND SURPLUS Capital reserve Share premium account – opening balance Add: Receipts on exercise of employee stock options Income tax benefit arising from exercise of stock options General reserve – opening balance Less: Gratuity transitional liability (refer Note 23.2.23) Less: Capitalized on issue of bonus shares Add: Transferred from the profit and loss account Add: Fair value of employee options issued in exchange of Infosys BPO options (refer Note 23.2.16) Balance in profit and loss account

6

6

2,768

1,543

58

1,206

25 2,851 3,258

19 2,768 3,015

– –

9 138

447

378

– 3,705 6,642 13,204

12 3,258 4,844 10,876

Non-trade (unquoted), current investments, at the lower of cost and fair value Liquid mutual fund units* Aggregate amount of unquoted investments

2008

2007

659 46

637 46

66

66

171

90

22 964 11 11 –

– 839 11 11 –

– 964

– 839

964

839

85 7 7 99

69 3 7 79

Refer Note 23.2.16 for details of investments ** Investments include 17,37,092 (17,37,092) options in Infosys BPO (refer Note 23.2.16) *

5.

DEFERRED TAX ASSETS Fixed assets Sundry debtors Others

3. FIXED ASSETS in Rs. crore, except as otherwise stated

Original cost As at April 1, 2007

Land: Freehold Leasehold Buildings* Plant and machinery*# Computer equipment*# Furniture and fixtures*# Vehicles Previous year

76 95 1,471 760 944 541 2 3,889 2,837

Depreciation and amortization

Additions Deductions / For the Retirement year during the year

55 3 482 210 189 127 1 1,067 1,098

– – – 147 172 129 – 448 46

As at March 31, 2008

As at April 1, 2007

131 98 1,953 823 961 539 3 4,508 3,889

– – 266 414 714 344 1 1,739 1,275

For the Deductions / year Retirement during the year

– – 111 130 218 87 – 546 469

– – – 147 172 129 – 448 5

Net book value

As at March 31, 2008

As at March 31, 2008

As at March 31, 2007

– – 377 397 760 302 1 1,837 1,739

131 98 1,576 426 201 237 2 2,671 2,150

76 95 1,205 346 230 197 1 2,150

Note: Buildings include Rs. 250/- being the value of 5 shares of Rs. 50/- each in Mittal Towers Premises Co-operative Society Limited * Includes certain assets provided on operating lease to Infosys BPO, a subsidiary. Please refer Note 23.2.6 for details # During the year ended March 31, 2008, certain assets which are old and not in use having a gross book value of Rs. 448 crore (net book value Nil) were retired

Infosys Annual Report 2007-08

| 69

Schedules to the balance sheet in Rs. crore, except as otherwise stated

in Rs. crore, except as otherwise stated

As at March 31, 6. SUNDRY DEBTORS* Debts outstanding for a period exceeding six months Unsecured Considered doubtful Other debts Unsecured Considered good** Considered doubtful Less: Provision for doubtful debts Includes dues from companies where directors are interested

2008

2007

20

15

3,093 20 3,133 40 3,093

2,292 7 2,314 22 2,292

2 8

7 2

–

–

243 5,772

302 4,790

414 6,429

378 5,470

2

2

*

**

7.

Includes dues from subsidiaries (refer Note 23.2.7)

CASH AND BANK BALANCES Cash on hand Balances with scheduled banks in Indian Rupees In current accounts* In deposit accounts Balances with non-scheduled banks in foreign currency** In current accounts Includes balance in unclaimed dividend account (refer Note 23.2.25a) ** Refer Note 23.2.13 for details of balances in non-scheduled banks

LOANS AND ADVANCES Unsecured, considered good Loans to subsidiary (refer Note 23.2.7) Advances Prepaid expenses For supply of goods and rendering of services Advance to gratuity fund trust Interest accrued but not due Others Unbilled revenues Advance income tax MAT credit entitlement Loans and advances to employees Housing and other loans Salary advances Electricity and other deposits Rental deposits Deposits with financial institutions and body corporate (refer Note 23.2.14) Mark-to-market on options / forward contracts Unsecured, considered doubtful Loans and advances to employees Less: Provision for doubtful loans and advances to employees

70 |

Power of talent

Advances received from clients Unearned revenue Unclaimed dividend Includes due to subsidiary Company (Refer Note 23.2.7)

2008

2007

36

23

46 329 149

28 208 120

239 52 206

281 23 172

116

–

33 – 3 1,209 4 268 2 1,483

– 2 4 861 4 295 2 1,162

7

5

1,559

371

265 381

63 207

43 2,248

21 662

*

*

8.

As at March 31, 9. CURRENT LIABILITIES Sundry creditors Goods and services* Accrued salaries and benefits Salaries Bonus and incentives Unavailed leave For other liabilities Provision for expenses Retention monies Withholding and other taxes payable Mark-to-market on options / forward contracts Gratuity obligation – unamortized amount relating to plan amendment Due to option holders of Infosys BPO Others

32

22

27

28

10 12 186 20 287 472 215 169

3 – 51 20 124 312 352 –

42 64 24 11

42 63 20 10

1,421

261

– 2,705

15 1,199

1 2,706

1 1,200

1 2,705

1 1,199

10. PROVISIONS Proposed dividend Provision for Tax on dividend Income taxes* Post-sales client support and warranties Refer Note 23.2.12

*

Schedules to profit and loss account in Rs. crore, except as otherwise stated

For the year ended March 31, 11. SOFTWARE DEVELOPMENT EXPENSES Salaries and bonus including overseas staff expenses Overseas group health insurance Contribution to provident and other funds Staff welfare Technical sub-contractors – subsidiaries Technical sub-contractors – others Overseas travel expenses Visa charges and others Software packages For own use For service delivery to clients Communication expenses Computer maintenance Consumables Rent Provision for post-sales client support and warranties 12. SELLING AND MARKETING EXPENSES Salaries and bonus including overseas staff expenses Overseas group health insurance Contribution to provident and other funds Staff welfare Overseas travel expenses Visa charges and others Traveling and conveyance Commission and earnout charges Brand building Professional charges Rent Marketing expenses Telephone charges Communication expenses Printing and stationery Advertisements Office maintenance Sales promotion expenses Consumables Software packages For own use Computer maintenance Power and fuel Insurance charges Rates and taxes Bank charges and commission Miscellaneous expenses

2008

2007

6,805 42

5,396 101

170 49 773 202 298 133

143 41 633 231 283 109

213 25 55 24 18 23

192 25 52 21 22 17

46 8,876

12 7,278

503 1

442 3

2 3 83 3 3 14 55 18 12 15 8 2 1 4 – 3 –

2 3 92 2 3 24 69 23 16 25 6 1 2 3 – 2 –

– – – – – – – 730

1 – – – – – – 719

in Rs. crore, except as otherwise stated

For the year ended March 31, 13. GENERAL AND ADMINISTRATION EXPENSES Salaries and bonus including overseas staff expenses Overseas group health insurance Contribution to provident and other funds Professional charges Telephone charges Power and fuel Traveling and conveyance Overseas travel expenses Visa charges and others Office maintenance Guesthouse maintenance* Insurance charges Printing and stationery Donations Rent Advertisements Repairs to building Repairs to plant and machinery Rates and taxes Professional membership and seminar participation fees Postage and courier Books and periodicals Provision for bad and doubtful debts Provision for doubtful loans and advances Commission to non-whole-time directors Freight charges Bank charges and commission Research grants Auditors’ remuneration Statutory audit fees Certification charges Others Out-of-pocket expenses Miscellaneous expenses

2008

2007

223 (2) 12 167 117 106 92 14 1 120 2 20 13 20 15 6 22 18 34

172 – 11 137 106 88 85 15 2 95 2 27 13 21 14 8 23 15 24

9 9 4 42

9 8 5 24

– 4 1 1 5

1 2 1 1 13

1 – – – 3 1,079

– – – – 5 927

650

182

4 24 5 683 86

116 35 42 375 31

819 (169) (20) 630

375 – (23) 352

For non-training purposes

*

14. OTHER INCOME, NET Interest received on deposits with banks and others* Dividend received on investment in liquid mutual funds (non-trade unquoted) Miscellaneous income (refer Note 23.2.15) Exchange (losses) / gains Includes tax deducted at source

*

15. PROVISION FOR TAXATION Income taxes* MAT credit entitlement Deferred taxes Refer Note 23.2.12

*

Infosys Annual Report 2007-08

| 71

Schedules to cash flow statement in Rs. crore, except as otherwise stated

For the year ended March 31, 16. CHANGE IN LOANS AND ADVANCES As per the balance sheet* Add: Gratuity transitional liability Gratuity obligation – unamortized amount relating to plan amendment (refer Note 23.2.23) Less: Deposits with financial institutions included in cash and cash equivalents** Interest accrued but not due MAT credit entitlement Advance income taxes separately considered Less: Opening balance considered

2008

2007

2,705 9

1,199 9

(33)

–

(1,260) (186) (169)

(140) (51) –

(215) 851 (665) 186

(352) 665 (485) 180

Less: Opening balance considered*

Power of talent

2007

1,067 (957) 1,260 1,370

1,057 (571) 957 1,443

964 – 964 (125) – (839) –

839 2 841 (649) (11) (876) (695)

6,429

5,470

1,260 7,689

140 5,610

51 654

25 298

(186) 519

(51) 272

Excludes Rs. Nil (Rs. 41 crore) toward movement of land from leasehold to freehold

20. INVESTMENTS IN SECURITIES* As per the balance sheet Add: Provisions on investments Less: Investment in subsidiaries Profit on sale of liquid mutual funds Opening balance considered Refer Note 23.2.16 for investment and redemptions

3,731 (2)

1,824 (2)

–

(2)

(33)

–

(381) (1,559) (265) 1,491 (1,179) 312

(207) (371) (63) 1,179 (832) 347

630

352

(137)

85

20

23

169

–

(25)

(19)

(174) 483

(20) 421

Adjusted for liability towards Intellectual Property Rights (refer Note 23.2.21)

72 |

2008

*

*

18. INCOME TAXES PAID Charge as per the profit and loss account Add / (Less): Increase / (Decrease) in advance income taxes Increase / (Decrease) in deferred taxes Increase / (Decrease) in MAT credit entitlement Income tax benefit arising from exercise of stock options (Increase) / Decrease in income tax provision

For the year ended March 31, 19. PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESS As per the balance sheet* Less: Opening capital work-in-progress Add: Closing capital work-in-progress *

* Includes loans to subsidiary and net of gratuity transitional liability ** Excludes restricted deposits held with LIC of Rs. 161 crore (Rs. 121 crore) for funding leave liability

17. CHANGE IN CURRENT LIABILITIES AND PROVISIONS As per the balance sheet Add / (Less): Unclaimed dividend Due to option holders of Infosys BPO Gratuity obligation – unamortized amount relating to plan amendment Provisions separately considered in the cash flow statement Income taxes Dividends Dividend taxes

in Rs. crore, except as otherwise stated

21. CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD As per the balance sheet Add: Deposits with financial institutions, included herein (excluding interest accrued but not due)** Excludes restricted deposits held with LIC of Rs. 161 crore (Rs. 121 crore) for funding leave liability

**

22. INTEREST AND DIVIDEND RECEIVED Interest accrued but not due opening balance Add: Interest and dividend income Less: Interest accrued but not due closing balance

Schedules to the financial statements for the year ended March 31, 2008 23.

Significant accounting policies and notes on accounts

Company overview Infosys Technologies Limited (“Infosys” or “the Company”) along with its majority owned and controlled subsidiary, Infosys BPO Limited, India (“Infosys BPO”) formerly known as Progeon Limited, and wholly-owned subsidiaries, Infosys Technologies (Australia) Pty. Limited (“Infosys Australia”), Infosys Technologies (China) Co. Limited (“Infosys China”), formerly known as Infosys Technologies (Shanghai) Co. Limited, Infosys Consulting, Inc., USA (“Infosys Consulting”) and Infosys Technologies S. de R.L. de C.V. (“Infosys Mexico”) is a leading global technology services organisation. The Company provides end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance. The solutions span the entire software life cycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, and testing and infrastructure management services. In addition, the Company offers software products for the banking industry.

23.1

Significant accounting policies

23.1.1 Basis of preparation of financial statements The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (“GAAP”) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Management evaluates all recently issued or revised accounting standards on an on-going basis. Pursuant to Institute of Chartered Accountants of India (ICAI) announcement “Accounting for Derivatives” on the early adoption of Accounting Standard AS 30 “Financial Instruments: Recognition and Measurement”, the Company has early adopted the Standard for the year under review, to the extent that the adoption does not conflict with existing mandatory accounting standards and other authoritative pronouncements, Company law and other regulatory requirements.

23.1.2 Use of estimates The preparation of the financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed assets and intangible assets. Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. The impairment loss to be expensed is determined as the excess of the carrying amount over the higher

of the asset’s net sales price or present value as determined above. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Where no reliable estimate can be made, a disclosure is made as contingent liability. Actual results could differ from those estimates.

23.1.3 Revenue recognition Revenue from software development on fixed-price, fixed-time frame contracts, where there is no uncertainty as to measurement or collectability of consideration is recognized as per the percentage of completion method. On time-and-materials contracts, revenue is recognized as the related services are rendered. Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates. Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized proportionately over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts requiring significant implementation services, where revenue is recognized as per the percentage of completion method. Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the then carrying value of the investment. Lease rentals are recognized ratably on a straight line basis over the lease term. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Company’s right to receive dividend is established.

23.1.4 Expenditure The cost of software purchased for use in software development and services is charged to cost of revenues in the year of acquisition. Charges relating to non-cancelable, long-term operating leases are computed primarily on the basis of the lease rentals, payable as per the relevant lease agreements. Post-sales customer support costs are estimated by management, determined on the basis of past experience. The costs provided for are carried until expiry of the related warranty period. Provisions are made for all known losses and liabilities. Leave encashment liability is determined on the basis of an actuarial valuation.

23.1.5 Fixed assets, intangible assets and capital work-in-progress Fixed assets are stated at cost, less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets, and the cost of fixed assets that are not yet ready for their intended use at the balance sheet date. Intangible assets are recorded at the consideration paid for acquisition.

23.1.6 Depreciation and amortization Depreciation on fixed assets is applied on the straight-line basis over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Individual low cost assets (acquired for less than Rs.  5,000/-) are depreciated within a year of acquisition. Intangible assets are amortized over their respective individual estimated useful lives on a straightline basis, commencing from the date the asset is available to the Company for its use.

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The Management estimates the useful lives for the other fixed assets as follows: Buildings Plant and machinery Computer equipment Furniture and fixtures Vehicles

15 years 5 years 2-5 years 5 years 5 years

23.1.7 Retirement benefits to employees 23.1.7.a Gratuity Infosys provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the Company contributes all the ascertained liabilities to the Infosys Technologies Limited Employees’ Gratuity Fund Trust (the “Trust”). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by law.

23.1.7.b Superannuation Certain employees of Infosys are also participants in a defined contribution plan. Until March 2005, the Company made contributions under the superannuation plan (the Plan) to the Infosys Technologies Limited Employees’ Superannuation Fund Trust. The Company had no further obligations to the Plan beyond its monthly contributions. From April 1, 2005, a portion of the monthly contribution amount was paid directly to the employees as an allowance and the balance amount was contributed to the trust.

23.1.7.c Provident fund Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon is paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Infosys Technologies Limited Employee’s Provident Fund Trust equal to a specified percentage of the covered employee’s salary. Infosys also contributes to a government administered pension fund on behalf of its employees. The interest rate payable by the trust to the beneficiaries every year is being notified by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

23.1.8 Research and development Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure incurred on research and development is depreciated over the estimated useful lives of the related assets.

23.1.9 Foreign currency transactions Revenue from overseas clients and collections deposited in foreign currency bank accounts are recorded at the exchange rate as of the date of the respective transactions. Expenditure in foreign currency is accounted at the exchange rate prevalent when such expenditure is incurred. Disbursements made out of foreign currency bank accounts are reported at the daily rates. Exchange differences are recorded when the amount actually received on sales or actually paid when expenditure is incurred, is converted into Indian Rupees. The exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise. Fixed assets purchased at overseas offices are recorded at cost, based on the exchange rate as of the date of purchase. The charge for depreciation is determined as per the Company’s accounting policy.

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Power of talent

Monetary current assets and monetary current liabilities that are denominated in foreign currency are translated at the exchange rate prevalent at the date of the balance sheet. The resulting difference is also recorded in the profit and loss account.

23.1.10 Forward contracts and options in foreign currencies The Company uses foreign exchange forward contracts and options to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts and options reduces the risk or cost to the Company and the Company does not use the foreign exchange forward contracts or options for trading or speculation purposes. The Company records the gain or loss on effective hedges in the foreign currency fluctuation reserve until the transactions are complete. On completion, the gain or loss is transferred to the profit and loss account of that period. To designate a forward contract or option as an effective hedge, management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. In the absence of a designation as effective hedge, a gain or loss is recognized in the profit and loss account.

23.1.11 Income tax Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum alternate tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal tax after the tax holiday period. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year. Tax benefits of deductions earned on exercise of employee stock options in excess of compensation charged to profit and loss account are credited to the share premium account.

23.1.12 Earnings per share In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of any extra-ordinary / exceptional item. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable, had

the shares been actually issued at fair value (i.e. the average market value of the outstanding shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. The number of shares and potentially dilutive equity shares are adjusted for any stock splits and bonus shares issues effected prior to the approval of the financial statements by the board of directors.

The aggregate amount incurred on certain specific expenses (contd.) in Rs. crore

Particulars

Guesthouse maintenance** Commission and earnout charges Brand building Rent Insurance charges Computer maintenance Printing and stationery Consumables Donations Advertisements Marketing expenses Repairs to building Repairs to plant and machinery Rates and taxes Professional membership and seminar participation fees Postage and courier Provision for post-sales client support and warranties Books and periodicals Provision for bad and doubtful debts Provision for doubtful loans and advances Commission to non-whole-time directors Sales promotion expenses Freight charges Bank charges and commission Auditors’ remuneration Statutory audit fees Certification charges Others Out-of-pocket expenses Research grants Miscellaneous expenses

23.1.13 Investments Trade investments are the investments made to enhance the Company’s business interests. Investments are either classified as current or long-term based on the Management’s intention at the time of purchase. Current investments are carried at the lower of cost and fair value. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment. Long-term investments are carried at cost and provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

23.1.14 Cash flow statement Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

23.1.15 Onerous contracts Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

23.2

Notes on accounts

Amounts in the financial statements are presented in Rupees crore, except for per share data and as otherwise stated. Certain amounts do not appear due to rounding off, and are detailed in Note 23.3. All exact amounts are stated with the suffix “/-”. One crore equals 10 million. The previous period / year figures have been regrouped / reclassified, wherever necessary to conform to the current presentation.

23.2.1 Aggregate expenses The aggregate amount incurred on certain specific expenses:

Salaries and bonus including overseas staff expenses# Contribution to provident and other funds Staff welfare Staff welfare Overseas group health insurance* Overseas travel expenses Visa charges and others Traveling and conveyance Technical sub-contractors – subsidiaries Technical sub-contractors – others Software packages For own use For service delivery to clients Professional charges Telephone charges Communication expenses Power and fuel Office maintenance

Year ended March 31, 2008 2007 7,531 184

6,010 156

52 41 395 137 95 773 202

44 104 390 113 88 633 231

213 25 185 125 57 106 120

193 25 160 112 53 88 95

9 9

9 8

46 4 42 – 4 3 1 1

12 5 24 1 2 2 1 1

1 – – – 5 3 10,685

– – – – 13 5 8,924

17

17

Fringe Benefit Tax (FBT) in India included in the above

in Rs. crore

Particulars

Year ended March 31, 2008 2007 2 2 14 24 55 69 50 47 20 27 24 21 14 15 18 22 20 21 10 11 15 25 22 23 18 15 34 24

During the year, the Company paid an amount of Rs. 102 crore to the California Division of Labor Standards Enforcement (DLSE) toward settlement of possible overtime payment to certain employees * The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the year, the Company completed its reconciliation of amounts actually claimed by employees to date, including past years, with the aggregate amount of recorded liability and the net excess provision of Rs. 71 crore was written back. ** For non-training purposes #

23.2.2

Capital commitments and contingent liabilities



in Rs. crore

Particulars

As at March 31, 2008 2007

Estimated amount of unexecuted capital contracts (net of advances and deposits) Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favor of various government authorities and others Claims against the Company, not acknowledged as debts*: Net of amount Rs. 101 crore (Rs. 238 crore) paid to statutory authorities

600

655

2

2

3

15

Infosys Annual Report 2007-08

| 75

Particulars

As at March 31, 2008 2007

Forward contracts outstanding In US $

US $ US $ 521,000,000 165,000,000 (Equivalent approximate in Rs. crore) 2,085 711 In Euro €10,000,000 €2,000,000 (Equivalent approximate in Rs. crore) 63 12 In GBP – £5,500,000 (Equivalent approximate in Rs. crore) – 47 Options outstanding Range barrier options in US $ US $ US $ 100,000,000 205,000,000 (Equivalent approximate in Rs. crore) 400 884 Euro accelerator in Euro €12,000,000 €24,000,000 (Equivalent approximate in Rs. crore) 76 138 Target redemption structure (GBP) – £16,000,000 (Equivalent approximate in Rs. crore) – 136 Euro forward extra €5,000,000 – (Equivalent approximate in Rs. crore) 32 –

* Claims against the Company not acknowledged as debts include demand from the Indian tax authorities for payment of additional tax of Rs. 98 crore (Rs. 234 crore), including interest of Rs. 18 crore ( Rs. 51 crore) upon completion of their tax review for fiscal 2004. The tax demand is mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income Tax Act, 1961. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The matter is pending before the Commissioner of Income Tax (Appeals) Bangalore. The Company is contesting the demand and the Management, including its tax advisors, believes that its position is likely to be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

23.2.6 Obligations on long-term, non-cancelable operating leases The lease rentals charged during the year ended March 31, 2008 and March 31, 2007 and maximum obligations on long-term non-cancelable operating leases payable as per the rentals stated in the respective agreements: in Rs. crore

Particulars Lease rentals recognized during the period Lease obligations Within one year of the balance sheet date Due in a period between one year and five years Due after five years

23.2.5 Activity in foreign currency in Rs. crore

Particulars

Year ended March 31, 2008 2007

Earnings in foreign currency (on receipts basis) Income from software services and products 14,468 12,143 Interest received on deposits with banks 22 13 Expenditure in foreign currency (on payments basis) Travel expenses (including visa charges) 400 363 Professional charges 74 70 Technical sub-contractors – subsidiaries 753 612 Other expenditure incurred overseas for software development 5,257 4,342 Net earnings in foreign currency (on the receipts and payments basis) 8,006 6,769

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Power of talent

32

88 24 140

92 44 168

in Rs. crore

Particulars

The Company is primarily engaged in the development and maintenance of computer software. The production and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and certain information as required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

Capital goods Software packages

2007

28



Plant and machinery

Year ended March 31, 2008 2007 296 258 8 8 304 266

As at March 31, 2008

Fixed assets provided on operating lease to Infosys BPO, a subsidiary Company, as at March 31, 2008 and 2007:

23.2.3 Quantitative details

Particulars

47

The operating lease arrangements extend upto a maximum of 10 years from their respective dates of inception and relates to rented overseas premises and car rentals. Some of the lease agreements have a price escalation clause.

Building

in Rs. crore

50

in Rs. crore

As of the balance sheet date, the Company’s net foreign currency exposure that is not hedged by a derivative instrument or otherwise is nil (Rs. 995 crore as at March 31, 2007).

23.2.4 Imports (valued on the cost, insurance and freight basis)

Year ended March 31, 2008 2007

Computer equipment Furniture and fixtures Total

Cost Accumulated Net book depreciation value 58 13 45 46 9 37 22 13 9 20 11 9 2 2 – 2 2 – 10 8 2 12 10 2 92 36 56 80 32 48

The aggregate depreciation charged on the above during the year ended March 31, 2008 amounted to Rs. 9 crore (Rs. 10 crore for the year ended March 31, 2007). The Company has non-cancelable operating leases on equipped premises leased to Infosys BPO. The leases extend for periods between 36 months and 58 months from the date of inception. The lease rentals received are included as a component of sale of shared services (refer Note 23.2.7). Lease rental commitments from Infosys BPO:

in Rs. crore

Lease rentals Within one year of the balance sheet date Due in a period between one year and five years Due after five years

As at March 31, 2008

2007

4

12

– – 4

4 – 16

The rental income from Infosys BPO for the year ended March 31, 2008 amounted to Rs. 18 crore (Rs. 17 crore for the year ended March 31, 2007).

23.2.7 Related party transactions Name of the related party

Infosys BPO Infosys Australia Infosys China Infosys Consulting Infosys Mexico Infosys BPO s.r.o* P-Financial Services Holding B.V. Netherlands**

Country

India Australia China USA Mexico Czech Republic Netherlands

Holding as at March 31, 2008 2007 99.98% 98.92%# 100% 100% 100% 100% 100% 100% 100% – 99.98%

98.92%

99.98%

–

Note: *Infosys BPO s.r.o is a wholly-owned subsidiary of Infosys BPO. ** P-Financial Services Holding B.V. Netherlands is a wholly-owned subsidiary of Infosys BPO. # Excludes deferred purchase of shares from shareholders of Infosys BPO of 3,60,417 shares. Infosys guarantees the performance of certain contracts entered into by Infosys BPO.

The details of the related party transactions entered into by the Company, in addition to the lease commitments described in Note 23.2.6, for the year ended March 31, 2008 and 2007 are as follows:

in Rs. crore

Particulars Capital transactions Financing transactions Infosys BPO Infosys China Infosys Mexico Infosys Consulting Loans Infosys China Revenue transactions Purchase of services Infosys BPO (Including Infosys BPO s.r.o) Infosys Australia Infosys China Infosys Consulting Infosys Mexico Purchase of shared services including facilities and personnel Infosys BPO (Including Infosys BPO s.r.o) Interest income Infosys China Sale of services Infosys Australia Infosys China Infosys Consulting Sale of shared services including facilities and personnel Infosys BPO (Including Infosys BPO s.r.o) Infosys Consulting

Year ended March 31, 2008 2007

22 – 22 81

612 23 – 14

10

8

– 482 54 231 3

8 397 37 189 –

11

3

–

1

4 – 1

3 2 3

44 2

19 2

Details of amounts due to or due from and maximum dues from subsidiaries for the year ended March 31, 2008 and year ended March 31, 2007: in Rs. crore

Particulars

As at March 31, 2008

Loans and advances Infosys China Debtors Infosys China Infosys BPO (Including Infosys BPO s.r.o) Creditors Infosys China Maximum balances of loans and advances Infosys BPO (Including Infosys BPO s.r.o) Infosys Australia Infosys China Infosys Consulting Sundry creditors Infosys Mexico

2007

32

22

8

2

–

–

7

5

2 31 32 16

2 24 25 14

–

–

During the year ended March 31, 2008, an amount of Rs. 20 crore (Rs. 19 crore for the year ended March 31, 2007) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

23.2.8 Transactions with key management personnel The key management personnel comprise directors and statutory officers. Particulars of remuneration and other benefits paid to the key management personnel during the year ended March 31, 2008 and March 31, 2007 have been detailed in Schedule 23.3 since the amounts are less than a crore. The aggregate managerial remuneration under Section 198 of the Companies Act, 1956, to the directors (including managing director) is: in Rs. crore

Particulars

Year ended March 31, 2008 2007

Whole-time directors Salary Contributions to provident and other funds Perquisites and incentives Total remuneration Non-whole-time directors Commission Sitting fees Reimbursement of expenses Total remuneration

2

1

– 5 7

– 3 4

4 – 1 5

2 – – 2

Infosys Annual Report 2007-08

| 77

Computation of net profit in accordance with Section 349 of the Companies Act, 1956, and calculation of commission payable to non-whole-time directors:

in Rs. crore

Particulars Net Profit after tax from ordinary activities Add: Whole-time directors’ remuneration Directors’ sitting fees Commission to non-whole-time directors Provision for bad and doubtful debts Provision for doubtful loans and advances Provision on investments Depreciation as per books of account Provision for taxation Less: Depreciation as envisaged under Section 350 of the Companies Act* Profit of a capital nature Net profit on which commission is payable Commission payable to non-whole-time directors Maximum allowed as per the Companies Act, 1956 at 1% Maximum approved by the share holders (0.5%) Commission approved by the Board

Year ended March 31, 2008 2007 4,470

3,777

7 –

4 –

4

2

42

24

– –

1 2

546 630 5,699

469 352 4,631

546 –

469 –

5,153

4,162

52

42

26 4

21 2

1,17,60,000 ADSs representing 1,17,60,000 equity shares. All options under the 1998 Plan are exercisable for ADSs representing equity shares. A compensation committee comprising independent members of the Board of Directors administers the 1998 Plan. All options have been granted at 100% of fair market value. The 1998 Plan lapsed on January 6, 2008, and consequently no further shares will be issued to employees under this plan. Number of options granted, exercised, and forfeited Options outstanding, beginning of period Granted Less: Exercised Forfeited Options outstanding, end of period

Year ended March 31, 2008 2007 20,84,124 – 5,00,465 53,212 15,30,447

45,46,480 – 22,91,213 1,71,143 20,84,124

1999 Stock Option Plan (“the 1999 Plan”) In fiscal 2000, the Company instituted the 1999 Plan. The shareholders and the Board of Directors approved the plan in June 1999, which provides for the issue of 5,28,00,000 equity shares to the employees. The compensation committee administers the 1999 Plan. Options were issued to employees at an exercise price that is not less than the fair market value. Number of options granted, exercised, and forfeited Options outstanding, beginning of period Granted Less: Exercised Forfeited Options outstanding, end of period

Year ended March 31, 2008

2007

18,97,840 – 2,85,431 1,17,716 14,94,693

1,91,79,074 6,38,761 1,78,08,689 1,11,306 18,97,840

In fiscal 2007, the Company accelerated the vesting of 5,72,000 outstanding unvested options which were due to be vested in the normal course by October, 2007.

The Company depreciates fixed assets based on estimated useful lives that are lower than those implicit in Schedule XIV of the Companies Act, 1956. Accordingly, the rates of depreciation used by the Company are higher than the minimum prescribed by Schedule XIV.

The aggregate options considered for dilution are set out in Note 23.2.20

Infosys BPO has provided for commission of Rs. 0.12 crore to a non-whole-time director of Infosys, during the year ended March 31, 2008 and 2007.

Pro forma Accounting for Stock Option Grants

*

23.2.9 Research and development expenditure in Rs. crore

Particulars Revenue

Year ended March 31, 2008 2007 201 167

23.2.10 Dues to small-scale industrial undertakings and dues to micro enterprises and small enterprises As at March 31, 2008, the Company has no outstanding dues to micro enterprises and small enterprises / small-scale industrial undertaking. As at March 31, 2007, the Company had no outstanding dues to small-scale industrial undertaking.

23.2.11 Stock option plans The Company has two stock option plans that are currently operational.

1998 Stock Option Plan (“the 1998 Plan”) The 1998 Plan was approved by the board of directors in December 1997 and by the shareholders in January 1998, and is for issue of

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Power of talent

Infosys applies the intrinsic value-based method of accounting for determining compensation cost for its stock-based compensation plan. Had the compensation cost been determined using the fair value approach, the Company’s net income and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

in Rs. crore

Particulars Net profit As reported Less: Stock-based employee compensation expense Adjusted pro forma Basic earnings per share as reported Pro forma basic earnings per share Diluted earnings per share as reported Pro forma earnings per share as reported

Year ended March 31, 2008 2007 4,470

3,783

13 4,457

12 3,771

78.24

67.93

78.00

67.72

77.98

66.44

77.74

66.23

The Finance Act, 2007 included Fringe Benefit Tax (FBT) on Employee Stock Option Plan (ESOP). FBT liability crystallizes on the date of exercise of stock options. During the year ended March 31, 2008, 7,85,896 equity shares were issued pursuant to the exercise of stock options by employees under both the 1998 and 1999 stock option plans. FBT on exercise of stock options of Rs. 2 crore has been paid by the Company and subsequently recovered from the employees. Consequently, there is no impact on the profit and loss account.

Details of maximum balances during the period with non-scheduled banks:

In current accounts ABN Amro Bank, Taipei, Taiwan Bank of America, Palo Alto, USA Citibank NA, Melbourne, Australia Citibank NA, Tokyo, Japan Deutsche Bank, Brussels, Belgium Deutsche Bank, Frankfurt, Germany Deutsche Bank, Amsterdam, Netherlands Deutsche Bank, Paris, France Deutsche Bank, Spain Deutsche Bank, Zurich, Switzerland Deutsche Bank, UK HSBC Bank PLC, Croydon, UK Nordbanken, Stockholm, Sweden Royal Bank of Canada, Toronto, Canada Svenska Handels Bank, Stockholm, Sweden UFJ Bank, Tokyo, Japan Morgan Stanley Bank, US-Account ABN Amro Bank, Copenhagen, Denmark Citibank NA, Singapore Citibank NA, Thailand

23.2.12 Income taxes The provision for taxation includes tax liabilities in India on the Company’s global income as reduced by exempt incomes and any tax liabilities arising overseas on income sourced from those countries. Most of Infosys’ operations are conducted through Software Technology Parks (“STPs”). Income from STPs are tax exempt for the earlier of 10 years commencing from the fiscal year in which the unit commences software development, or March 31, 2009. Infosys also has operations in a Special Economic Zone (SEZ). Income from SEZs is fully tax exempt for the first 5 years, 50% exempt for the next 5 years and 50% exempt for another 5 years subject to fulfilling certain conditions. Pursuant to the amendments in the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). The MAT liability can be carried forward and set off against the future tax liabilities. Accordingly, Rs. 169 crore was carried forward and shown under “Loans and Advances” in the balance sheet as of March 31, 2008. The tax provision for the year ended March 31, 2008 includes a net reversal of Rs. 121 crore for liability no longer required.

23.2.13 Cash and bank balances Details of balances as on balance sheet dates with non-scheduled banks: in Rs. crore

Balances with non-scheduled banks In current accounts ABN Amro Bank, Taipei, Taiwan Bank of America, Palo Alto, USA Citibank NA, Melbourne, Australia Citibank NA, Tokyo, Japan Deutsche Bank, Brussels, Belgium Deutsche Bank, Frankfurt, Germany Deutsche Bank, Amsterdam, Netherlands Deutsche Bank, Paris, France Deutsche Bank, Zurich, Switzerland Deutsche Bank, UK HSBC Bank PLC, Croydon, UK Royal Bank of Canada, Toronto, Canada Deutsche Bank, Spain Nordbanken, Stockholm, Sweden Svenska Handelsbanken, Sweden

As at March 31, 2008 2007 – 272

2 293

30 2 5

36 1 13

5

4

3 2

2 3

1 76 2

– 5 11

12 2 1 1 414

7 1 – – 378

in Rs. crore

Year ended March 31, 2008 2007 2 637

2 573

126 14 38

95 30 29

20

31

3 5 2

5 6 1

15 311 32 1

13 26 237 2

17

15

2 3

1 34

9

–

– – –

– – –

23.2.14 Loans and advances “Advances” mainly comprises prepaid travel and per-diem expenses and advances to vendors. Deposits with financial institutions and body corporate:

in Rs. crore

Particulars

As at March 31, 2008

Deposits with financial institutions and body corporate HDFC Limited GE Capital Services India Life Insurance Corporation of India

2007

1,000 260

– 140

161 1,421

121 261

Maximum balance (including accrued interest) held as deposits with financial institutions and body corporate:

in Rs. crore

Particulars

Year ended March 31, 2008 2007

Deposits with financial institutions and body corporate HDFC Limited GE Capital Services India Life Insurance Corporation of India

1,031 312

510 382

161

132

Mr. Deepak M. Satwalekar, Director, is also a Director of HDFC Limited. Except as director in this financial institution, he has no direct interest in any transactions.

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| 79

Deposit with LIC represents amount deposited to settle employee benefit / leave obligations as and when they arise during the normal course of business.

23.2.15 Fixed assets

Depreciation charged to the profit and loss account relating to assets costing less than Rs. 5,000/- each and other low value assets.

in Rs. crore

Charged during the period

Year ended March 31, 2008 2007 16 26

The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of these agreements, the Company has the option to purchase the properties on expiry of the lease period. The Company has already paid 99% of the value of the properties at the time of entering into the lease-cum-sale agreements. These amounts are disclosed as “Land – leasehold” under “Fixed assets” in the financial statements. Additionally, certain land has been purchased for which the Company has possession certificate for which sale deeds are yet to be executed as at March 31, 2008.

23.2.16 Details of investments in Rs. crore

Particulars Long-term investments OnMobile Systems Inc., (formerly Onscan Inc.) USA 53,85,251 (1,00,000) common stock at US $0.4348 each, fully paid, par value US $0.001 each* Nil (1,00,000) Series A voting convertible preferred stock at US $0.4348 each, fully paid, par value US $0.001 each Nil (44,00,000) Series A non-voting convertible preferred stock at US $0.4348 each, fully paid, par value US $0.001 each* M-Commerce Ventures Pte. Ltd., Singapore 100 (100) ordinary shares of Singapore $1 each, fully paid, par value Singapore $1 each 563 (684) redeemable preference shares of Singapore $1, fully paid, at a premium of Singapore $1,110 per redeemable preferred stock 337 (216) redeemable preference shares of Singapore $1, fully paid, par value Singapore $1 each Less: Provision for investment

As at March 31, 2008 2007

9

–

–

–

–

–

2

– 11 11 –

9

–

2

– 11 11 –

During the year all of the preferred stock investments in OnMobile Systems Inc., U.S.A have been converted to common stock

*

80 |

Power of talent

in Rs. crore

Particulars

Profit / (loss) on disposal of fixed assets during the year ended March 31, 2008 and 2007 is less than Rs. 1 crore and accordingly disclosed in Note 23.3.

Particulars

Details of investments in and disposal of securities during the year ended March 31, 2008 and 2007: Year ended March 31, 2008 2007

Investment in securities Subsidiaries Long-term investments Liquid mutual funds Redemption / Disposal of investment in securities Long-term investments Liquid mutual funds Net movement in investments

125 – 1,518 1,643

649 – 4,341 4,990

– 1,518 1,518 125

– 5,025 5,025 (35)

Investment purchased and sold during the year ended March 31, 2008: in Rs. crore

Name of the fund Reliance Liquidity Fund – Treasury Plan Birla Cash Plus Fund – Institutional Plan Tata Liquid Super High Investment Fund – Monthly Dividend Birla Liquid Plus Fund – Institutional Plan Deutsche Insta Cash Plus Fund – Institutional Plan Deutsche Money Plus Fund – Institutional Plan DSP Merrill Lynch Liquid Fund – Institutional Plan DSP Liquid Plus – Institutional Plan Franklin Floating Rate – Institutional Plan Templeton India Treasury Management Account – Institutional Plan HSBC – Cash Fund Institutional Plan HSBC Liquid Plus – Institutional Plan ICICI Institutional Liquid Plus Grindlays Cash Fund – Institutional Plan SCB – Grindlays Floating Rate Fund – Institutional Plan Sundaram Liquid Plus Super – Institutional Plan

Face value Rs./-

Units Cost

10

24,20,31,906

242

10

14,97,08,069

150

1,000

9,75,757

110

10

9,99,96,063

100

10

9,98,32,115

100

10

9,88,84,670

100

1,000

4,49,824

45

1,000

4,49,824

45

10

7,47,75,059

75

1,000

7,38,016

75

10

9,99,56,442

100

10 10

9,91,02,655 9,50,63,038

100 100

1,000

4,99,985

50

10

4,98,93,280

50

10

7,41,34,846

75

Particulars of investments made during the year ended March 31, 2008 and 2007: in Rs. crore

Particulars of investee companies Infosys Consulting Infosys Mexico Infosys China Infosys BPO

Year ended March 31, 2008 2007 81 14 22 – – 23 22 612* 125 649

Includes an amount of Rs. 12 crore toward fair value of Infosys BPO options swapped with equivalent Infosys options and Rs. 2 crore due to option holders of Infosys BPO relating to option purchases paid during the year ended March 31, 2008.

*

Investment in Infosys Mexico On June 20, 2007, the Company incorporated a wholly-owned subsidiary, Infosys Technologies S. de R.L. de C.V. in Mexico (“Infosys Mexico”). As of March 31, 2008, the Company has invested an aggregate of Mexican Peso 60 million (Rs. 22 crore) in the subsidiary.

Investment in Infosys BPO Buyback of shares and options On December 8, 2006, the shareholders of Infosys BPO approved a buy-back of up to 12,79,963 equity shares at a fair market value of Rs. 604/- per equity share. The buy-back was in accordance with Section 77A of the Indian Companies Act, 1956. Pursuant to the buy-back offer, Infosys BPO bought back 11,39,469 equity shares which were subsequently cancelled on December 29, 2006. In January 2007, the Company initiated the purchase of all the shares and outstanding options in Infosys BPO from its shareholders and option holders comprising current and former employees of Infosys BPO. The shareholders were given a choice to sell their shares at fair market value and the option holders were given the choice to sell their options and / or swap Infosys BPO options for Infosys options at a swap ratio based on fair market value. Consequent to this proposal, Infosys paid an aggregate of Rs. 71 crore for the purchase of shares and options and granted 1,51,933 Infosys options under the 1999 plan valued at fair value of Rs. 12 crore. Accordingly, the investment in Infosys BPO increased by Rs. 83 crore and reserves increased by Rs. 12 crore in March 2007. In February 2008, Infosys paid an aggregate of Rs. 22 crore to complete the deferred purchase of 3,60,417 shares from certain employees of Infosys BPO. Consequent to this purchase, Infosys holding in Infosys BPO increased to 99.98% as at March 31, 2008.

Conversion of cumulative preference shares in Infosys BPO Infosys BPO issued an aggregate of 87,50,000, 0.005% cumulative convertible preference shares of par value Rs. 100 each to Citicorp International Finance Corporation (“CIFC”) for an aggregate consideration of Rs. 94 crore as per the shareholder agreement as of March 31, 2005. Each preference share was convertible to one equity share of par value Rs. 10/-. On June 30, 2005, CIFC exercised its rights under the shareholder’s agreement and converted the preference shares to equity shares. Pursuant to the conversion, the equity share capital of Infosys BPO increased by Rs. 9 crore to Rs. 33 crore and the share premium increased by Rs. 79 crore to Rs. 85 crore. On June 30, 2006, the Company completed the acquisition of the entire holdings (87,50,000 shares amounting to 23% of the equity on a fully diluted basis) of CIFC in Infosys BPO for a consideration amounting to Rs. 530 crore (US $115.13 million). The net consideration of Rs. 309 crore, after withholding taxes of Rs. 221 crore was remitted to CIFC on the same date.

Investment in Infosys Consulting

Consulting, Inc. As of March 31, 2008, the Company has invested an aggregate of US $40 million (Rs. 171 crore) in the subsidiary.

Provisions for investments The Company evaluates all investments for any diminution in their carrying values that is other than temporary. The amount of provision made on trade investments during the year ended March 31, 2008 amounted to nil. (Rs. 2 crore for the year ended March 31, 2007). The Company provided Rs. Nil and Rs. 1 crore during the year ended on March 31, 2008 and 2007 on revision of the carrying amount of non-trade current investments to fair value.

Redemption of preference shares On September 7, 2007, the Company realised Rs. 0.36 crore on redemption of the preference shares in M-Commerce Ventures Pte. Limited, Singapore (“M-Commerce”). There were no such transactions in the quarter or year ended March 31, 2007. The entire investment in M-Commerce was fully provided for in earlier years. Accordingly, the realized gain was taken to the profit and loss account and the provision written back.

23.2.17 Segment reporting The Infosys Group’s operations predominantly relate to providing end-to-end business solutions, that leverage technology thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed based on the geographical location of customers. The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. These are as set out in the note on significant accounting policies. Industry segments at the Company are primarily financial services comprising customers providing banking, finance and insurance services; manufacturing companies; companies in the telecommunications and the retail industries; and others such as utilities, transportation and logistics companies. Income and direct expenses in relation to segments is categorized based on items that are individually identifiable to that segment, while the remainder of the costs are categorized in relation to the associated turnover of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably. The Company believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as “unallocated” and directly charged against total income. Fixed assets used in the Company’s business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made. Customer relationships are driven based on the location of the respective client. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom; and the rest of the world comprises all other places except those mentioned above and India. Geographical revenues are segregated based on the location of the customer who is invoiced or in relation to which the revenue is otherwise recognized.

During the year ended March 31, 2008, the Company invested US $20 million (Rs. 81 crore) in its wholly-owned subsidary Infosys

Infosys Annual Report 2007-08

| 81

Industry Segments

Geographical Segments

Year ended March 31, 2008 and 2007:

Year ended March 31, 2008 and 2007: in Rs. crore

Particulars

Revenues Identifiable operating expenses Allocated expenses Segmental operating income

Financial Manufac- Telecom Retail Others services turing

Particulars

North America

Europe

India

Revenues

9,873 8,395

4,207 3,393

219 214

4,308 3,636 2,466 2,110

1,668 1,314 1,050 853

46 53 56 53

754 618 337 287

6,776 5,621 3,909 3,303

3,099 2,649

1,489 1,226

117 108

258 242

4,963 4,225

2,291 1,805

3,215 1,945 2,491 15,648 2,409 1,386 2,598 13,149

2,426 2,139

1,028 767

1,401 1,016

1,424 1,244

572 454

804 605

1,856 1,568

Unallocable expenses Operating income Other income (expense), net Net profit before taxes and exceptional items Income taxes Net profit after taxes and before exceptional items Income on sale of investments (net of taxes) Net profit after taxes and exceptional items

691 584

1,010 788

836 1,085 588 1,111

6,776 5,621

485 348

3,909 3,303

624 450

782 835

in Rs. crore

Total

5,706 4,951

624 652



4,963 4,225 546 469 4,417 3,756 683 373

Identifiable operating expenses Allocated expenses Segmental operating income Unallocable expenses Operating income Other income (expense), net Net profit before taxes and exceptional items Income taxes

5,100 4,129 630 352

Net profit after taxes and before exceptional items

Rest of the World

Total

1,349 15,648 1,147 13,149

546 469 4,417 3,756 683 373

5,100 4,129 630 352

4,470 3,777

Income on sale of investments (net of taxes) 4,470 3,777

– 6

4,470 3,783

Net profit after taxes and exceptional items

– 6

4,470 3,783

23.2.18 Provision for doubtful debts Periodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectibility of specific dues, risk perceptions of the industry in which the customer operates, and general economic factors, which could affect the customer’s ability to settle. The Company normally provides for debtor dues outstanding for 180 days or longer as at the balance sheet date. As at March 31, 2008, the Company has provided for doubtful debts of Rs. 20 crore (Rs. 7 crore as at March 31, 2007) on dues from certain customers although the outstanding amounts were less than 180 days old, since the amounts were considered doubtful of recovery. The Company pursues the recovery of the dues, in part or full.

23.2.19 Dividends remitted in foreign currencies The Company remits the equivalent of the dividends payable to the holders of ADS (“ADS holders”) in Indian Rupees to the depository bank, which is the registered shareholder on record for all owners of the Company’s ADSs. The depository bank purchases the foreign currencies and remits dividends to the ADS holders.

82 |

Power of talent

Particulars of dividends remitted: in Rs. crore

Particulars

Interim dividend for fiscal 2008 Interim dividend for fiscal 2007 Final dividend for fiscal 2007 Silver Jubilee special dividend* Final dividend for fiscal 2006*

Number of shares to which the dividends relate 10,92,19,011 7,76,06,280 10,92,18,536 7,70,94,270 7,70,94,270

Year ended March 31,

2008 2007 66 – – 39 71 – – 116 – 33

Adjusted for bonus issue.

*

23.2.20 Reconciliation of basic and diluted shares used in computing earnings per share Particulars Number of shares considered as basic weighted average shares outstanding Add: Effect of dilutive issues of shares / stock options Number of shares considered as weighted average shares and potential shares outstanding

Year ended March 31, 2008 2007

57,13,98,340 55,68,52,339 19,08,547

1,24,90,355

57,33,06,887 56,93,42,694

23.2.21 Intellectual Property Rights Infosys was liable to pay Aeronautical Development Agency (ADA) a maximum amount of Rs. 20 crore (US $4.4 million) by June 12, 2012 through a revenue sharing arrangement toward acquisition of Intellectual Property Rights in AUTOLAY, a commercial software application product used in designing high performance structural systems. During the quarter ended December 31, 2006, Infosys foreclosed the arrangement by paying the net present value of the future revenue share amounting to Rs. 13.5 crore (US $3 million). The remainder of the liability amounting to Rs. 6.5 crore (US $1.4 million) has been written back and disclosed in “Other Income”.

23.2.22 Exceptional items During the year ended March 31, 2005 the Company sold its entire investment in Yantra Corporation, USA (Yantra) for a total consideration of US $12.57 million. An amount of Rs. 49 crore, representing 90% of the consideration, was received by the Company and the balance amount was deposited in Escrow to indemnify any contractual contingencies. During the year ended March 31, 2007, the Company received the balance amount of Rs. 5 crore on fulfillment of the Escrow obligations. Since the carrying value of the investment is nil, the entire proceeds of Rs. 5 crore (net of taxes, as applicable) had been recognized in the profit and loss account as an exceptional item. During the year ended March 31, 2007, the Company received Rs. 1 crore from CiDRA Corporation toward redemption of shares on recapitalization. The remainder of investment was written off against provision made earlier.

23.2.23 Gratuity plan Effective April 1, 2006, the Company adopted the revised accounting standard on employee benefits. Pursuant to the adoption, the transitional obligations of the Company amounted to Rs. 9 crore. As required by the standard, the obligation has been recorded with the transfer of Rs. 9 crore to general reserves. The following table sets out the status of the gratuity plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

in Rs. crore

Particulars Obligations at period beginning Service cost Interest cost Actuarial (gain) / loss Benefits paid Amendment in benefit plans Obligations at period end Defined benefit obligation liability as at the balance sheet date is wholly-funded by the Company Change in plan assets Plan assets at period beginning, at fair value Expected return on plan assets Actuarial gain / (loss) Contributions Benefits paid Plan assets at period end, at fair value Reconciliation of present value of the obligation and the fair value of the plan assets Fair value of plan assets at the end of the period Present value of the defined benefit obligations at the end of the period Asset recognized in the balance sheet Assumptions Interest rate Estimated rate of return on plan assets

As at March 31, 2008 2007 221 180 47 44 16 14 (9) – (21) (17) (37) – 217 221

221 18 2 9 (21) 229

167 16 3 52 (17) 221

229

221

217 12

221 –

7.92% 7.92%

7.99% 7.99% in Rs. crore

Particulars

Year ended March 31, 2008 2007

Gratuity cost for the period Service cost Interest cost Expected return on plan assets Actuarial (gain) / loss Amortizations (Reduction in benefit) Net gratuity cost Assumptions Interest rate Estimated rate of return on plan assets

47 16 (18) (11) (4) 30

44 14 (16) (3) – 39

7.92% 7.92%

7.99% 7.99%

Investment details of plan assets 100% of our plan assets are invested in debt instruments. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by Rs. 37 crore, which is being amortized on a straight line basis to the profit and loss account over 10 years representing the average future service period of the employees. The unamortized liability, as at March 31, 2008, amounted to Rs. 33 crore and is shown under “current liabilities”.

23.2.24 Provident fund The Guidance Note on Implementing AS 15, Employee benefits (revised 2005) issued by Accounting Standards Board (ASB) states

Infosys Annual Report 2007-08

| 83

benefit involving employer-established provident funds, which require interest shortfalls to be recompensed, are to be considered as defined benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the Company’s actuary has expressed an inability, to reliably measure provident fund liabilities. Accordingly the Company is unable to exhibit the related information.

23.2.25 Cash flow statement 23.2.25.a Unclaimed dividend

Profit and loss account items

in Rs. crore

Schedule

Description

Profit and Loss 12

Provision for investments

The balance of cash and cash equivalents includes Rs. 2 crore as at March 31, 2008 (Rs. 2 crore as at March 31, 2007) set aside for payment of dividends.

23.2.25.b Restricted cash Deposits with financial institutions and body corporate as at March 31, 2008 include an amount of Rs. 161 crore (Rs. 132 crore as at March 31, 2007) deposited with Life Insurance Corporation of India to settle employee benefit / leave obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and is hence not considered in “cash and cash equivalents”.

23.3

13

Details of rounded off amounts

The financial statements are represented in Rs. crore as per the approval received from the Department of Company Affairs (DCA) earlier. Those items which are not represented in the financial statement due to rounding off to the nearest Rs. crore are given below.

Balance sheet items

in Rs. crore

Schedule Description 3

7 23.2.6

23.2.13

23.2.16

84 |

Fixed assets Additions Vehicles Deductions / retirements Plant and machinery Furniture and fixtures Depreciation and amortization for the period Vehicles Cash in hand Computers on operating lease to Infosys BPO Net book value Balances with non-scheduled banks ABN Amro Bank, Copenhagen, Denmark ABN Amro Bank, Taipei, Taiwan Citibank NA, Singapore Citibank NA, Thailand Nordbanken, Stockholm, Sweden Svenska Handels Bank, Stockholm, Sweden UFJ Bank, Tokyo, Japan Deutsche Bank, Zurich, Switzerland Long-term investments OnMobile (common stock) OnMobile (Series A - voting)

Power of talent

As at March 31, 2008 2007

–

–

146.47 129.24

0.34 0.15

0.36 –

1.00 –

–

0.08

0.01

0.04

0.23 0.02 0.31

1.51 0.03 0.16

0.89

0.05

1.23 –

0.01 0.06

1.34

0.21

– –

0.19 0.19

23.2.1

23.2.7

23.2.15

23.2.13

Selling and marketing expenses Visa charges and others Printing and stationery Office maintenance Computer maintenance Advertisement Software packages for own use Communication expenses Rates and taxes Consumables General and administration expenses Provision for doubtful loans and advances Overseas group health insurance Commission to non-whole-time directors Visa charges and others Auditors’ remuneration Statutory audit fees Others Certification charges Out-of-pocket expenses Freight charges Bank charges and commission Aggregate expenses Provision for doubtful loans and advances Commission to non-whole-time directors Guesthouse maintenance Auditors’ remuneration Statutory audit fees Others Certification charges Out-of-pocket expenses Bank charges and commission Freight charges Related party transactions, revenue transactions Purchase of shared services including facilities and personnel Interest income – Infosys China Sale of services – Infosys Consulting Sale of services – Infosys BPO (including Infosys BPO s.r.o) Profit on disposal of fixed assets, included in miscellaneous income Loss on disposal of fixed assets, included in miscellaneous expenses Profit / (loss) on disposal of fixed assets, net Maximum balance with non-scheduled banks ABN Amro Bank, Copenhagen, Denmark Citibank NA, Singapore Citibank NA, Sharjah, UAE Citibank NA, Thailand Bank of China, Beijing, China

Year ended March 31, 2008 2007 (0.36)

2.02

2.17 1.16 0.39 0.02 4.21 0.12 1.33 0.02 0.23

– – 0.26 0.09 – 0.50 0.75 – 0.31

0.54 (2.30)

0.56 (0.11)

4.07 0.59

1.83 2.40

0.64 0.11 0.05 0.03 0.76 1.08

0.46 0.04 0.04 0.03 0.93 1.24

0.54

0.56

4.07 2.71

1.83 2.23

0.64 0.11 0.05 0.03 1.08 0.76

0.48 0.04 – 0.03 1.24 0.93

0.96

–

0.36

0.28

–

0.49

0.18

0.17

(0.01)

(0.05)

0.17

0.12

0.25 0.08 – 0.33 –

0.11 0.19 0.18 0.16 0.02

Cash flow statement items

in Rs. crore

Year ended March 31,

Schedule

Description

Cash flow statement

Profit / loss on sale of fixed assets Proceeds on disposal of fixed assets Provision for investments

2008

2007

0.17 0.38 (0.36)

0.12 0.40 2.02

Transactions with key management personnel The key management personnel comprise directors and statutory officers. Particulars of remuneration and other benefits paid to the key management personnel during the year ended March 31, 2008 and 2007:

in Rs. crore

Name

Chairman and Chief Mentor N. R. Narayana Murthy* Co-Chairman Nandan M. Nilekani Chief Executive Officer and Managing Director S. Gopalakrishnan Chief Operating Officer S. D. Shibulal Whole-time directors K. Dinesh T. V. Mohandas Pai Srinath Batni Chief Financial Officer V. Balakrishnan

Salary

Contributions to provident and other funds

Perquisites and incentives

Total remuneration

– 0.06

– 0.02

– 0.21

– 0.29

0.21 0.16

0.05 0.04

0.56 0.33

0.82 0.53

0.21 0.16

0.05 0.04

0.55 0.34

0.81 0.54

0.20 0.13

0.05 0.04

0.53 0.29

0.78 0.46

0.21 0.13 0.33 0.24 0.31 0.20

0.05 0.04 0.11 0.08 0.08 0.04

0.56 0.33 1.36 0.60 0.88 0.50

0.82 0.50 1.80 0.92 1.27 0.74

0.26 0.17

0.08 0.05

0.70 0.56

0.63 0.78

Whole-time director till August 20, 2006

*

Name Non-whole-time Directors Deepak M. Satwalekar Prof. Marti G. Subrahmanyam David L. Boyles Dr. Omkar Goswami Sen. Larry Pressler Rama Bijapurkar Claude Smadja Sridar A. Iyengar Prof. Jeffrey S. Lehman N. R. Narayana Murthy* *

Commission

Sitting fees

0.56 0.23 0.47 0.21 0.47 0.21 0.44 0.19 – 0.04 0.44 0.21 0.42 0.21 0.46 0.21 0.43 0.18 0.50 0.14

– – – – – – – – – – – – – – – – – – – –

Reimbursement of Total remuneration expenses 0.01 – 0.12 0.11 – – 0.01 0.02 – 0.03 0.01 0.01 0.20 0.20 0.09 0.13 0.02 – – –

0.57 0.23 0.59 0.32 0.47 0.21 0.45 0.21 – 0.07 0.45 0.22 0.62 0.41 0.55 0.34 0.45 0.18 0.50 0.14

Appointed as additional director effective August 21, 2006

Infosys Annual Report 2007-08

| 85

Balance sheet abstract and the company’s general business profile Registration details: Registration No.: 13115 State code: 08 in Rs. thousand, except per share data

Balance sheet date

As at March 31, 2008

Capital raised during the year Public issue Rights issue Bonus issue Private placement Preferential offer of shares under the Employee Stock Option Plan scheme* Position of mobilization and deployment of funds Total liabilities Total assets Sources of funds Paid-up capital Reserves and surplus Secured loans Unsecured loans Application of funds Net fixed assets Investments Net current assets Deferred tax assets Miscellaneous expenditure Accumulated losses Performance of the Company Income from software services and products Other income Total income Total expenditure Profit / loss before tax and exceptional items Profit / loss after tax and before exceptional items Earnings per share from ordinary activities before exceptional items (Basic) (Rs.) Earnings per share from ordinary activities before exceptional items (Diluted) (Rs.) Dividend rate**(%) (Equity share of par value Rs. 5/- each) Generic names of principal products / services of the Company Item code No.(ITC code) Product description *

– – – – 5,87,548 13,48,94,374 13,48,94,374 28,59,980 13,20,34,394 – – 3,93,14,664 96,39,279 8,49,52,555 9,87,876 – – 15,64,78,368 68,26,299 16,33,04,667 11,23,03,242 5,10,01,425 4,47,04,412 78.24 77.98 665% 85249009 Computer software

Issue of shares arising on the exercise of options granted to employees under the Company’s (Nos.)

1998 Plan 1999 Plan

5,00,465 2,85,431

Includes special dividend of 400% (Rs. 20 per share)

**

N. R. Narayana Murthy

Nandan M. Nilekani

S. Gopalakrishnan

S. D. Shibulal

Chairman and Chief Mentor

Co-Chairman

Chief Executive Officer and Managing Director

Chief Operating Officer

Deepak M. Satwalekar

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami

Rama Bijapurkar

Director

Director

Director

Director

Claude Smadja

Sridar A. Iyengar

David L. Boyles

Prof. Jeffrey S. Lehman

Director

Director

Director

Director

K. Dinesh

T. V. Mohandas Pai

Srinath Batni

V. Balakrishnan

Director

Director

Director

Chief Financial Officer

Bangalore

K. Parvatheesam

April 15, 2008

Company Secretary

86 |

Power of talent

Consolidated financial statements Auditors’ report To the board of directors of Infosys Technologies Limited and its subsidiaries We have audited the attached consolidated Balance Sheet of Infosys Technologies Limited (the Company) and its subsidiaries (collectively referred to as the ‘Infosys Group’) as at March 31, 2008, the consolidated Profit and Loss Account of the Infosys Group for the year ended on that date and the consolidated Cash Flow Statement of the Infosys Group for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that the consolidated financial statements have been prepared by the Company’s management in accordance with the requirements of Accounting Standard (AS 21), Consolidated Financial Statements prescribed by Companies (Accounting Standards) Rules, 2006. In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the consolidated Balance Sheet, of the state of affairs of the Infosys Group as at March 31, 2008; (b) in the case of the consolidated Profit and Loss account, of the profit of the Infosys Group for the year ended on that date; and (c) in the case of the consolidated Cash Flow Statement, of the cash flows of the Infosys Group for the year ended on that date. for BSR & Co. Chartered Accountants

Bangalore April 15, 2008

Natrajan Ramkrishna Partner. Membership No. 32815



Infosys Annual Report 2007-08

| 87

Consolidated balance sheet As at March 31, in Rs. crore

Schedule

2008

2007

1 2

286 13,509 13,795 – 13,795

286 10,969 11,255 4 11,259

5,439 1,986 3,453 1,324 4,777 72 119

4,642 1,836 2,806 965 3,771 25 92

6 7 8

3,297 6,950 2,771 13,018

2,436 5,834 1,251 9,521

LESS: CURRENT LIABILITIES AND PROVISIONS Current liabilities Provisions NET CURRENT ASSETS

9 10

1,912 2,279 8,827 13,795

1,469 681 7,371 11,259

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

24

SHAREHOLDERS’ FUNDS Share capital Reserves and surplus MINORITY INTEREST APPLICATION OF FUNDS FIXED ASSETS Original cost Less: Accumulated depreciation and amortization Net book value Add: Capital work-in-progress

3

INVESTMENTS DEFERRED TAX ASSETS CURRENT ASSETS, LOANS AND ADVANCES Sundry debtors Cash and bank balances Loans and advances

4 5

Note: The schedules referred to above are an integral part of the consolidated balance sheet As per our report attached

for BSR & Co. Chartered Accountants

Natrajan Ramkrishna

N. R. Narayana Murthy

Nandan M. Nilekani

S. Gopalakrishnan

S. D. Shibulal

Partner Membership No. 32815

Chairman and Chief Mentor

Co-Chairman

Chief Executive Officer and Managing Director

Chief Operating Officer

Deepak M. Satwalekar

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami

Rama Bijapurkar

Director

Director

Director

Director

Claude Smadja

Sridar A. Iyengar

David L. Boyles

Prof. Jeffrey S. Lehman

Director

Director

Director

Director

K. Dinesh

T. V. Mohandas Pai

Srinath Batni

V. Balakrishnan

Director

Director

Director

Chief Financial Officer

Bangalore

K. Parvatheesam

April 15, 2008

Company Secretary

88 |

Power of talent

Consolidated profit and loss account For the year ended March 31, in Rs. crore, except per share data

Schedule Income from software services, products and business process management Software development and business process management expenses GROSS PROFIT Selling and marketing expenses General and administration expenses

2008 16,692 9,207 7,485 916 1,331 2,247 5,238 – 598 4,640 704 – 5,344 685 4,659 – 4,659 – 4,659 4,941 – – 4,941 9,600

2007 13,893 7,458 6,435 929 1,115 2,044 4,391 – 514 3,877 372 2 4,247 386 3,861 6 3,867 11 3,856 2,219 4 1 2,214 6,070

343 415 1,144 1,902 323 547 6,828 9,600

278 371 – 649 102 378 4,941 6,070

81.53 81.26

69.11 67.59

81.53 81.26

69.22 67.70

57,13,98,340 57,33,06,887

55,68,52,339 56,93,42,694

11 12 13

OPERATING PROFIT before interest, depreciation and minority interest Interest Depreciation OPERATING PROFIT before tax, minority interest and exceptional items Other income, net Provision for investments NET PROFIT before tax, minority interest and exceptional items Provision for taxation (refer Note 24.2.8) NET PROFIT after tax and before minority interest and exceptional items Income on sale of investments, net of taxes (refer Note 24.2.19) NET PROFIT after tax, exceptional items and before minority interest Minority interest NET PROFIT after tax, exceptional items and minority interest Balance brought forward Less: Residual dividend paid Additional dividend tax

14

15

AMOUNT AVAILABLE FOR APPROPRIATION Dividend Interim Final One time special dividend Total dividend Dividend tax Amount transferred to general reserve Balance in profit and loss account EARNINGS PER SHARE* Equity shares of par value Rs. 5/- each Before Exceptional items Basic Diluted After exceptional items Basic Diluted Number of shares used in computing earnings per share Basic Diluted SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

24

Note: * Refer Note 24.2.17 The schedules referred to above are an integral part of the consolidated profit and loss account As per our report attached

for BSR & Co. Chartered Accountants

Natrajan Ramkrishna

N. R. Narayana Murthy

Nandan M. Nilekani

S. Gopalakrishnan

S. D. Shibulal

Partner Membership No. 32815

Chairman and Chief Mentor

Co-Chairman

Chief Executive Officer and Managing Director

Chief Operating Officer

Deepak M. Satwalekar

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami

Rama Bijapurkar

Director

Director

Director

Director

Claude Smadja

Sridar A. Iyengar

David L. Boyles

Prof. Jeffrey S. Lehman

Director

Director

Director

Director

K. Dinesh

T. V. Mohandas Pai

Srinath Batni

V. Balakrishnan

Director

Director

Director

Chief Financial Officer

Bangalore April 15, 2008

K. Parvatheesam Company Secretary

Infosys Annual Report 2007-08

| 89

Consolidated cash flow statement For the year ended March 31, in Rs. crore

Schedule Net profit before tax, minority interest and exceptional items Adjustments to reconcile net profit before tax to cash provided by operating activities (Profit) / Loss on sale of fixed assets Depreciation Interest and dividend income Profit on sale of liquid mutual funds Provisions for investments Effect of exchange differences on translation of foreign currency cash and cash equivalents Changes in current assets and liabilities Sundry debtors Loans and advances Current liabilities and provisions Income taxes paid NET CASH GENERATED BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets and change in capital work-in-progress Payment for purchase of business, net of cash acquired Payment for Intellectual Property Rights Investments in / disposal of securities Acquisition of minority interest in subsidiary Interest and dividend received Cash flow from investing activities before exceptional items Proceeds on sale of long-term investments (net of taxes) NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of share capital on exercise of stock options Dividends paid during the period, including dividend tax NET CASH USED IN FINANCING ACTIVITIES Effect of exchange differences on translation of foreign currency cash and cash equivalents NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

2008 5,344

2007 4,247

– 598 (681) – –

– 514 (315) (11) 2

(19)

7

16 17 18 19

(830) (190) 410 (549) 4,083

(828) (179) 530 (446) 3,521

20

(1,494) (101) – (47) (24) 546 (1,120) – (1,120)

(1,510) – 14 740 (660) 289 (1,127) 6 (1,121)

58 (835) (777)

1,216 (1,532) (316)

41 2,227 6,008 8,235

(7) 2,077 3,931 6,008

21 23

22 24

Note: The schedules referred to above are an integral part of the consolidated cash flow statement As per our report attached

for BSR & Co. Chartered Accountants

Natrajan Ramkrishna

N. R. Narayana Murthy

Nandan M. Nilekani

S. Gopalakrishnan

S. D. Shibulal

Partner Membership No. 32815

Chairman and Chief Mentor

Co-Chairman

Chief Executive Officer and Managing Director

Chief Operating Officer

Deepak M. Satwalekar

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami

Rama Bijapurkar

Director

Director

Director

Director

Claude Smadja

Sridar A. Iyengar

David L. Boyles

Prof. Jeffrey S. Lehman

Director

Director

Director

Director

K. Dinesh

T. V. Mohandas Pai

Srinath Batni

V. Balakrishnan

Director

Director

Director

Chief Financial Officer

Bangalore

K. Parvatheesam

April 15, 2008

Company Secretary

90 |

Power of talent

Schedules to the consolidated balance sheet in Rs. crore, except per share data

As at March 31, 1. SHARE CAPITAL Authorized Equity shares, Rs. 5/- par value 60,00,00,000 (60,00,00,000) equity shares Issued, subscribed and paid up Equity shares, Rs. 5/- par value* 57,19,95,758 (57,12,09,862) equity shares fully paid up [Of the above, 53,53,35,478 (53,53,35,478) equity shares, fully paid up have been issued as bonus shares by capitalization of the General reserve]

2008

2007

300

300

286

286

in Rs. crore, except as otherwise stated

As at March 31, 4. INVESTMENTS Trade (unquoted) – at cost Long-term investments Less: Provision made for investments

2008

2007

12 12 –

12 12 –

72 72 72

25 25 25

91 7 21 119

74 3 15 92

– 21

– 16

3,297 20 3,338 41 3,297

2,436 7 2,459 23 2,436

2

7

–

_

293 5,913

481 4,952

153 591 6,950 2

– 401 5,834 2

Non-trade (unquoted), current investments, at the lower of cost and fair value Liquid mutual funds* Aggregate amount of unquoted investments *

5.

286

286

Forfeited shares amounted to Rs. 1,500/(Rs. 1,500/-) For details of options in respect of equity shares, refer Note 24.2.7

Refer Note 24.2.11

DEFERRED TAX ASSETS Fixed assets Sundry debtors Others

*

6.

Refer Note 24.2.17 for details of basic and diluted shares

*

2. RESERVES AND SURPLUS Capital reserve Foreign currency translation reserve Share premium account – opening balance Add: Receipts on exercise of employee stock options Income tax benefit arising from exercise of stock options General reserve – opening balance Less: Capitalized on issue of bonus shares Less: Gratuity transitional liability (refer Note 24.2.20) Add: Transfer from the profit and loss account Add: Fair value of employee options issued in exchange of Infosys BPO options (refer Note 24.2.12) Balance in profit and loss account 3.

6 22 2,768

5 – 1,543

58

1,206

25 2,851 3,255 –

19 2,768 3,012 138

–

9

547

378

– 3,802 6,828 13,509

12 3,255 4,941 10,969

SUNDRY DEBTORS Debts outstanding for a period exceeding six months Unsecured Considered good Considered doubtful Other debts Unsecured Considered good* Considered doubtful

Less: Provision for doubtful debts Includes dues from companies where directors are interested

*

7.

CASH AND BANK BALANCES Cash on hand Balances with scheduled banks In current accounts* In deposit accounts in Indian Rupees Balances with non-scheduled banks In deposit accounts in foreign currency In current accounts in foreign currency *

Includes balance in unclaimed dividend account

FIXED ASSETS in Rs. crore, except as otherwise stated

Particulars

Goodwill Land: Freehold Leasehold Buildings Plant and machinery# Computer equipment# Furniture and fixtures# Leasehold improvements Vehicles Previous year

Original cost As at Additions Deletions / As at April 1, Retirement March 31, 2007 2008 589 100 – 689 76 55 – 131 96 3 – 99 1,471 487 – 1,958 787 229 147 869 1,028 220 172 1,076 573 137 129 581 20 13 – 33 2 1 – 3 4,642 1,245 448 5,439 2,983 1,706 47 4,642

Depreciation and amortization Net book value As at For the Deletions / As at As at As at April 1, year Retirement March 31, March 31, March 31, 2007 2008 2008 2007 – – – – 689 589 – – – – 131 76 – – – – 99 96 267 111 – 378 1,580 1,204 423 140 147 416 453 364 774 246 172 848 228 254 362 94 129 327 254 211 10 7 – 17 16 10 – – – – 3 2 1,836 598 448 1,986 3,453 2,806 1,328 514 6 1,836 2,806

Note: Buildings include Rs. 250/- being the value of 5 shares of Rs. 50/- each in Mittal Towers Premises Co-operative Society Limited # During the year ended March 31, 2008, certain assets which are old and not in use having a gross book value of Rs. 448 crore (net book value Nil) were retired

Infosys Annual Report 2007-08

| 91

Schedules to the consolidated balance sheet in Rs. crore, except as otherwise stated

As at March 31,

8.

LOANS AND ADVANCES Unsecured, considered good Advances Prepaid expenses For supply of goods and rendering of services Advance to gratuity and provident fund trust Interest accrued but not due Others Unbilled revenues Advance income tax MAT credit entitlement Loans and advances to employees Housing and other loans Salary advances Electricity and other deposits Rental deposits Deposits with financial institution and body corporate (refer Note 24.2.9) Mark-to-market forward contract and option – asset Other assets Unsecured, considered doubtful Loans and advances to employees Less: Provision for doubtful loans and advances to employees

9.

CURRENT LIABILITIES Sundry creditors Capital goods Goods and services Accrued salaries and benefits Salaries Bonus and incentives Unavailed leave For other liabilities Accrual for expenses Retention monies Withholding and other taxes payable Mark-to-market forward contract and option – liability Gratuity obligation – unamortized amount Others Advances received from clients Unearned revenue Unclaimed dividend Due to option holders of Infosys BPO

10. PROVISIONS Proposed dividend Provision for Tax on dividend Income taxes* Post-sales client support and warranties Refer Note 24.2.8

*

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Power of talent

2008

2007

33

34

13

3

12 186 34 278 482 218 175

– 51 20 108 320 353 –

42 73 32 25

42 76 21 15

1,446

295

– – 2,771

15 6 1,251

1 2,772

1 1,252

1 2,771

1 1,251

– 53

– 25

80 413 190

39 264 149

450 53 218

456 24 181

118 33 10 1,618 6 286 2 – 1,912

– – 12 1,150 4 311 2 2 1,469

1,559

371

265 402 53 2,279

63 224 23 681

Schedules to the consolidated profit and loss account

in Rs. crore, except as otherwise stated

For the year ended March 31, 11. SOFTWARE DEVELOPMENT AND BUSINESS PROCESS MANAGEMENT EXPENSES Salaries and bonus including overseas staff expenses Contribution to provident and other funds Staff welfare Overseas travel expenses Traveling and conveyance Technical sub-contractors Software packages For own use For service delivery to clients Communication expenses Rent Computer maintenance Consumables Provision for post-sales client support and warranties Miscellaneous expenses 12. SELLING AND MARKETING EXPENSES Salaries and bonus including overseas staff expenses Contribution to provident and other funds Staff welfare Overseas travel expenses Traveling and conveyance Brand building Commission and earnout charges Professional charges Rent Marketing expenses Telephone charges Printing and stationery Advertisements Sales promotion expenses Office maintenance Communication expenses Insurance charges Consumables Software packages For own use Computer maintenance Rates and taxes Miscellaneous expenses

2008

2007

7,651

6,071

192 58 505 2 265

154 46 461 – 289

225 26 79 49 27 21

203 25 69 34 23 24

45 62 9,207

13 46 7,458

607

552

4 3 102 4 56 64 21 15 19 8 1 6 3 – 2 – –

3 3 106 8 70 101 24 19 26 6 1 3 2 1 1 – –

– – – 1 916

1 – – 2 929

Schedules to consolidated profit and loss account

Schedules to consolidated cash flow statement

in Rs. crore, except as otherwise stated

For the year ended March 31, 13. GENERAL AND ADMINISTRATION EXPENSES Salaries and bonus including overseas staff expenses Contribution to provident and other funds Staff welfare Telephone charges Professional charges Power and fuel Office maintenance Guesthouse maintenance Traveling and conveyance Overseas travel expenses Insurance charges Printing and stationery Rates and taxes Donations Rent Advertisements Professional membership and seminar participation fees Repairs to building Repairs to plant and machinery Postage and courier Books and periodicals Recruitment and training Provision for bad and doubtful debts Provision for doubtful loans and advances Commission to non-whole-time directors Auditors’ remuneration Statutory audit fees Certification charges Others Out-of-pocket expenses Bank charges and commission Freight charges Research grants Software packages For own use Transaction processing fee and filing fee Miscellaneous expenses 14. OTHER INCOME, NET Interest received on deposits with banks and others* Dividend received on investment in liquid mutual funds (non-trade unquoted) Profit on sale of liquid mutual funds Miscellaneous income, net (refer Note 24.2.10) Exchange gains / (losses) Includes tax deducted at source 15. PROVISION FOR TAXATION Income taxes* MAT credit entitlement Deferred taxes *

2008

2007

350 12 1 133 189 122 136 1 102 24 26 18 36 20 22 7

271 12 – 118 151 97 108 – 95 23 32 16 26 21 17 8

9 23 20 11 4 3 43 – 4

10 22 15 8 5 7 26 1 2

1 – – – 1 1 4

1 – – – 1 1 13

– – 8 1,331

– 1 7 1,115

672

192

9 –

123 –

11 12 704 89

19 38 372 33

884 (177) (22) 685

413 – (27) 386

in Rs. crore, except as otherwise stated

For the year ended March 31,

2008

16. CHANGE IN SUNDRY DEBTORS As per the balance sheet Less: Opening balance considered Sundry debtors pertaining to acquired company 17. CHANGE IN LOANS AND ADVANCES As per the balance sheet* Add: Gratuity transitional liability Gratuity obligation – unamortized amount relating to plan amendment

(refer Note 24.2.20) Less: Deposits with financial institutions, included in cash and cash equivalents** MAT credit entitlement Advance income taxes separately considered Interest accrued but not due Less: Opening balance considered Loans and advances pertaining to acquired company

2007

3,297 2,436 (2,436) (1,608) (31) 830

– 828

2,771 9

1,251 9

(33)

–

(1,285) (175)

(174) –

(218) (186) 883 (682)

(353) (51) 682 (503)

(11) 190

– 179

4,191 (2)

2,150 (2)

(33)

–

–

(2)

(6)

–

(402) (1,559) (265) 1,924 (1,488)

(224) (371) (63) 1,488 (958)

(26) 410

– 530

Net of gratuity transitional liability Excludes restricted deposits held with LIC of Rs. 161 crore (Rs. 121 crore) for funding leave liability *

**

18. CHANGE IN CURRENT LIABILITIES AND PROVISIONS As per the balance sheet Add / (Less): Unclaimed dividend Gratuity obligation – unamortized amount relating to plan amendment Due to option holders of Infosys BPO Payable for acqusition of shared service center Provisions separately considered in the cash flow statement Income taxes Dividends Dividend tax Less: Opening balance considered Current liabilities and provisions pertaining to acquired company

Refer Note 24.2.8

*

Infosys Annual Report 2007-08

| 93

Schedules to consolidated cash flow statement in Rs. crore, except as otherwise stated

For the year ended March 31, 19. INCOME TAXES PAID Charge as per the profit and loss account Add: Increase / (Decrease) in advance income taxes Increase / (Decrease) in deferred taxes Increase / (Decrease) in MAT credit entitlement Less: Income tax benefit arising from exercise of stock options (Increase) / Decrease in income tax provision 20. PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESS As per balance sheet* Less: Opening capital work-in-progress Add: Closing capital work-in-progress Excludes Rs. Nil (Rs. 41 crore) toward movement of land from leasehold to freehold Excludes goodwill Rs. Nil (Rs. 411 crore) on buyback of Infosys BPO Ltd. shares * Excludes goodwill of Rs. 100 crore and net fixed assets of Rs. 10 crore related to acquired company *

*

94 |

Power of talent

2008

2007

685

386

(135) 27

86 27

175

–

(25)

(19)

(178) 549

(34) 446

1,135 (965) 1,324 1,494

1,116 (571) 965 1,510

in Rs. crore, except as otherwise stated

For the year ended March 31, 21. INVESTMENTS IN / (DISPOSAL OF) SECURITIES* As per the balance sheet Add: Provisions made on investments Less: Profit on sale of liquid mutual funds Opening balance considered Refer Note 24.2.11 for details of investments and redemptions 22. CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD As per the balance sheet Add: Deposits with financial institutions, included herein (excluding interest accrued but not due)**

2008

2007

72 – 72 – (25) 47

25 2 27 (11) (756) (740)

6,950

5,834

1,285 8,235

174 6,008

51 681

25 315

186 546

51 289

*

Excludes restricted deposits held with LIC of Rs. 161 crore (Rs. 121 crore) for funding leave liability

**

23. INTEREST AND DIVIDEND RECEIVED Interest accrued but not due opening balance Add: Interest and dividend income Less: Interest accrued but not due closing balance

Schedules to the consolidated financial statements for the year ended March 31, 2008 24.

Significant accounting policies and notes on accounts

Company overview Infosys Technologies Limited (“Infosys” or “the Company”) along with its majority owned and controlled subsidiary, Infosys BPO Limited, India (“Infosys BPO”) formerly known as Progeon Limited and wholly owned subsidiaries, Infosys Technologies (Australia) Pty. Limited (“Infosys Australia”), Infosys Technologies (China) Co. Limited (“Infosys China”) formerly known as Infosys Technologies (Shanghai) Co. Limited, Infosys Consulting, Inc., USA (“Infosys Consulting”) and Infosys Technologies S. de R.L. de C.V. (“Infosys Mexico”) is a leading global technology services organisation. The group of companies (“the Group”) provides end-to-end business solutions that leverage technology thereby enabling its clients to enhance business performance. The solutions span the entire software life cycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, and testing and infrastructure management services. In addition, the Group offers software products for the banking industry, business consulting and business process management services.

24. 1 Significant accounting policies 24.1.1 Basis of preparation of financial statements The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (“GAAP”) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an on-going basis. Pursuant to the ICAI announcement “Accounting for Derivatives” on the early adoption of Accounting Standard AS 30 “Financial Instruments: Recognition and Measurement”, the Company has early adopted the Standard for the year under review, to the extent that the adoption does not conflict with existing mandatory accounting standards and other authoritative pronouncements, company law and other regulatory requirements. The financial statements are prepared in accordance with the principles and procedures required for the preparation and presentation of consolidated financial statements as laid down under the accounting standard on Consolidated Financial Statements as specified in the Companies (Accounting Standards) Rules, 2006. The financial statements of Infosys – the parent Company, Infosys BPO, Infosys China, Infosys Australia, Infosys Mexico and Infosys Consulting have been combined on a line-by-line basis by adding together book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances and transactions and resulting unrealized gain /loss. The consolidated financial statements are prepared by applying uniform accounting policies in use at the Group. Minority interests have been excluded. Minority interests represent that part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the Company. Exchange difference resulting from the difference due to translation of foreign currency assets and liabilities in subsidiaries is disclosed as foreign currency translation reserve.

24.1.2 Use of estimates The preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed assets and intangible assets. The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. The impairment loss to be expensed is determined as the excess of the carrying amount over the higher of the asset’s net sales price or present value as determined above. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Where no reliable estimate can be made, a disclosure is made as contingent liability. Actual results could differ from those estimates.

24.1.3 Revenue recognition Revenue from software development and business process management on fixed-price, fixed-time frame contracts, where there is no uncertainty as to measurement or collectability of consideration is recognized as per the percentage of completion method. On time-and-materials contracts, revenue is recognized as the related services are rendered. Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates. Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized proportionately over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts requiring significant implementation services, where revenue is recognized as per the percentage of completion method. Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the then carrying value of the investment. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Company’s right to receive dividend is established.

24.1.4 Expenditure The cost of software purchased for use in software development and services is charged to cost of revenues in the year of acquisition. Charges relating to non-cancelable, long-term operating leases are computed primarily on the basis of the lease rentals, payable as per the relevant lease agreements. Post-sales customer support costs are estimated by the Management, determined on the basis of past experience. The costs provided for are carried until expiry of the related warranty period. Provisions are made for all known losses and liabilities. Leave encashment liability is determined on the basis of an actuarial valuation.

24.1.5 Fixed assets, including goodwill, intangible assets and capital work-in-progress Fixed assets are stated at cost, less accumulated depreciation. Direct costs are capitalised until fixed assets are ready for use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their

Infosys Annual Report 2007-08

| 95

intended use at the balance sheet date. Intangible assets are recorded at the consideration paid for acquisition. Goodwill comprises the excess of purchase consideration over the fair value of the net assets of the acquired enterprise. Impairment of goodwill is evaluated annually, unless it indicates a more frequent evaluation. Impairment is recorded in the profit and loss account to the extent the net discounted cashflows from the continuance of the acquisition are lower than its carrying value.

24.1.6 Depreciation and amortization Depreciation on fixed assets is applied on the straight-line method based on useful lives of assets as estimated by the Management. Depreciation for assets purchased / sold during the period is proportionately charged. Individual low cost assets (acquired for less than Rs. 5,000/-) are depreciated within a year of acquisition. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the company for its use. Leasehold improvements are written off over the lower of the remaining primary period of lease or the life of the asset. Management estimates the useful lives for the other fixed assets as follows: Buildings Plant and machinery Computer equipment Furniture and fixtures Vehicles

15 years 5 years 2-5 years 5 years 5 years

24.1.7 Retirement benefits to employees 24.1.7.a Gratuity Infosys provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees of the Company and Infosys BPO. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as at the balance sheet date and as per gratuity regulations for Infosys and Infosys BPO respectively. Infosys fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees’ Gratuity Fund Trust (the “Trust”). Infosys BPO fully contributes all ascertained liabilities to the Infosys BPO Employees’ Gratuity Fund Trust. Trustees administer contributions made to the Trust and contributions are invested in specific investments, as permitted by law.

24.1.7.b Superannuation Certain employees of Infosys are also participants in a defined contribution plan. Until March 2005, the Company made contributions under the superannuation plan (the Plan) to the Infosys Technologies Limited Employees’ Superannuation Fund Trust. The Company had no further obligations to the Plan beyond its monthly contributions. Certain employees of Infosys BPO were also eligible for superannuation benefit. Infosys BPO made monthly provisions under the superannuation plan based on a specified percentage of each covered employee’s salary. Infosys BPO had no further obligations to the superannuation plan beyond its monthly provisions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India. From April 1, 2005, a portion of the monthly contribution amount was paid directly to the employees as an allowance and the balance amount was contributed to the trust.

24.1.7.c Provident fund Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee’s salary. The Company contributes a part of the contributions to the Infosys Technologies Limited Employees’ Provident Fund Trust. The remaining contributions are

96 |

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made to a government administered provident fund. The interest rate payable by the trust to the beneficiaries every year is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from its investments and the administered interest rate. In respect of Infosys BPO, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and Infosys BPO make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee’s salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. Infosys BPO has no further obligations under the provident fund plan beyond its monthly contributions.

24.1.8 Research and development Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure incurred on research and development is depreciated over the estimated useful lives of the related assets.

24.1.9 Foreign currency transactions Revenue from overseas clients and collections deposited in foreign currency bank accounts are recorded at the exchange rate as of the date of the respective transactions. Expenditure in foreign currency is accounted at the exchange rate prevalent when such expenditure is incurred. Disbursements made out of foreign currency bank accounts are reported at the daily rates. Exchange differences are recorded when the amount actually received on sales or actually paid when expenditure is incurred, is converted into Indian Rupees. The exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise. Fixed assets purchased at overseas offices are recorded at cost, based on the exchange rate as of the date of purchase. The charge for depreciation is determined as per the Group’s accounting policy. Monetary current assets and monetary current liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the balance sheet. The resulting difference is also recorded in the profit and loss account. The translation of financial statements of the foreign subsidiaries from the local currency to the functional currency of the Company is performed for balance sheet accounts using the exchange rate in effect at the balance sheet date and for revenue, expense and cash-flow items using a monthly average exchange rate for the respective periods and the resulting difference is presented as foreign currency translation reserve included in “Reserves and Surplus”.

24.1.10 Forward contracts and options in foreign currencies The Company uses foreign exchange forward contracts and options to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts and options reduces the risk or cost to the Company and the Company does not use the foreign exchange forward contracts or options for trading or speculation purposes. The Company records the gain or loss on effective hedges in the foreign currency fluctuation reserve until the transactions are complete. On completion, the gain or loss is transferred to the profit and loss account of that period. To designate a forward contract and option as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. In the absence of a designation as effective hedge, a gain or loss is recognized in the profit and loss account.

24.1.11 Income tax Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually, based

on the tax liability computed after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal tax after the tax holiday period. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The differences that result between the profit offered for income taxes and the profit as per the financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate applicable for the full fiscal year for each of the consolidated entities. Tax benefits of deductions earned on exercise of employee stock options in excess of compensation charged to profit and loss account are credited to the share premium account

24.2 Notes on accounts Amounts in the financial statements are presented in Rupees crore, except for per share data and as otherwise stated. Certain amounts do not appear due to rounding off, and are detailed in Note 24.3. All exact amounts are stated with the suffix “/-”. One crore equals 10 million. The previous period / year figures have been regrouped / reclassified, wherever necessary to conform to the current presentation.

24.2.1 Aggregate expenses The aggregate amounts incurred on certain specific expenses: in Rs. crore

Particulars Salaries and bonus including overseas staff expenses# Contribution to provident and other funds Staff welfare Overseas travel expenses Traveling and conveyance Technical sub-contractors Software packages For own use For service delivery to clients Professional charges Telephone charges Communication expenses Power and fuel Office maintenance Guesthouse maintenance Rent Brand building Commission and earnout charges Insurance charges Printing and stationery Computer maintenance Consumables Rates and taxes Advertisements Donations Marketing expenses Professional membership and seminar participation fees Repairs to building Repairs to plant and machinery Postage and courier Provision for post-sales client support and warranties Books and periodicals Recruitment and training Provision for bad and doubtful debts Provision for doubtful loans and advances Commission to non-whole-time directors Sales promotion expenses Auditor’s remuneration Statutory audit fees Certification charges Others Bank charges and commission Freight charges Research grants Transaction processing fee and filing fee Miscellaneous expenses

24.1.12 Earnings per share In determining earnings per share, the Group considers the net profit after tax and includes the post-tax effect of any extraordinary / exceptional item. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of the outstanding shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. The number of shares and potentially dilutive equity shares are adjusted for any stock splits and bonus shares issues effected prior to the approval of the financial statements by the Board of Directors.

24.1.13 Investments Trade investments are the investments made to enhance the Group’s business interests. Investments are either classified as current or long-term based on the Management’s intention at the time of purchase. Current investments are carried at the lower of cost and fair value. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment. Long-term investments are carried at cost and provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

24.1.14 Cash flow statement Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Group are segregated.

24.1.15 Onerous contracts Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

Fringe Benefit Tax (FBT) in India included in the above

Year ended March 31, 2008 2007 8,608 6,894 208 170 62 50 631 589 108 103 265 289 225 26 210 141 81 122 136 1 86 56 64 26 19 27 21 36 13 20 19

202 25 174 124 70 98 109 – 70 70 101 33 17 23 24 26 11 21 26

9 23 20 11 45 4 3 43 – 4 3

10 22 15 8 13 5 7 26 1 2 3

1 – – 1 1 4 – 71 11,454

1 – – 1 – 13 1 55 9,502

21

20

During the year, the Company paid an amount of Rs. 102 crore to the California Division of Labor Standards Enforcement (DLSE) toward settlement of possible over time payment to certain employees # The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the year, the Company completed its reconciliation of amounts actually claimed by employees to date, including past years, with the aggregate amount of recorded liability and the net excess provision of Rs. 71 crore was written back. #

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24.2.2 Capital commitments and contingent liabilities

24.2.3 Obligations on long-term, non-cancelable operating leases

in Rs. crore

The lease rentals charged for the year ended March 31, 2008 and 2007 and maximum obligations on long-term, non-cancelable operating leases payable as per the rentals stated in the respective agreements:

Particulars Estimated amount of unexecuted capital contracts (net of advances and deposits) Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favor of various government authorities and others Claims against the Company, not acknowledged as debts* (Net of amount paid to statutory authorities of Rs. 101 crore (Rs. 138 crore) Forward contracts outstanding In US $ (Equivalent approximate in Rs. crore) In Euro (Equivalent approximate in Rs. crore) In GBP (Equivalent approximate in Rs. crore) Options contracts outstanding Euro forward extra in euro (Equivalent approximate in Rs. crore) Range barrier options in US $ (Equivalent approximate in Rs. crore) Euro accelerator (Equivalent approximate in Rs. crore) Target redemption structure (GBP) (Equivalent approximate in Rs. crore) Range barrier options in GBP (Equivalent approximate in Rs. crore)

As at March 31 2008 2007

in Rs. crore

664

680

Power of talent

Year ended March 31, 2008 2007

Lease rentals recognized during the period

86

70 in Rs. crore

7

3

9

15

US $ US $ 586,300,000 170,000,000

Lease obligations

As at March 31, 2008

Within one year of the balance sheet date Due in a period between one year and five years Due after five years

2007

65

48

145 76

111 44

The operating lease arrangements extend upto a maximum of 10 years from their respective dates of inception and relate to rented overseas premises and car rentals. Some of these lease agreements have price escalation clause.

2,346 €14,800,000

733 €2,000,000

93 £3,000,000

12 £5,500,000

24

47

€5,000,000

–

24.2.5 Transactions with key management personnel

32 – US $ US $ 100,000,000 206,500,000

Particulars of remuneration and other benefits paid to key management personnel during the year ended March 31, 2008 and 2007 have been detailed in Schedule 24.3, since the amounts are less than a crore.

400 890 €12,000,000 €24,000,000 76

24.2.4 Related party transactions During the year ended March 31, 2008, an amount of Rs. 20 crore (Rs. 19 crore for the year ended March 31, 2007) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

24.2.6 Research and development expenditure in Rs. crore

Particulars

138

– £16,000,000 – £7,500,000

136 £8,250,000

60

70

* Claims against the Company not acknowledged as debts include demand from the Indian tax authorities for payment of additional tax of Rs. 98 crore (Rs. 234 crore), including interest of Rs. 18 crore (Rs. 51 crore) upon completion of their tax review for fiscal 2004. The tax demand is mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income Tax Act, 1961. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The matter is pending before the Commissioner of Income Tax (Appeals) Bangalore. The Company is contesting the demand and the Management including its tax advisors believes that its position is likely to be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

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Particulars

Revenue

Year ended March 31, 2008 201

2007 167

24.2.7 Stock option plans The Company has two stock option plans that are currently operational.

1998 Stock Option Plan (“the 1998 Plan”) The 1998 Plan was approved by the Board of Directors in December 1997 and by the shareholders in January, 1998, and is for issue of 1,17,60,000 ADSs representing 1,17,60,000 equity shares. All options under the 1998 Plan are exercisable for ADSs representing equity shares. A compensation committee comprising independent members of the Board of Directors administers the 1998 Plan. All options have been granted at 100% of fair market value. The 1998 Plan lapsed on January 6, 2008, and consequently no further shares will be issued to employees under this plan. Number of options granted, exercised, and forfeited Options outstanding, beginning of period Granted Less: Exercised Forfeited Options outstanding, end of period

Year ended March 31, 2008 2007 20,84,124 – 5,00,465 53,212

45,46,480 – 22,91,213 1,71,143

15,30,447

20,84,124

1999 Stock Option Plan (“the 1999 Plan”) In fiscal 2000, the Company instituted the 1999 Plan. The shareholders and the Board of Directors approved the plan in June 1999, which provides for the issue of 5,28,00,000 equity shares to the employees. The compensation committee administers the 1999 Plan. Options will be issued to employees at an exercise price that is not less than the fair market value. Number of options granted, exercised, and forfeited Options outstanding, beginning of period Granted Less: Exercised Forfeited Options outstanding, end of period

Year ended March 31, 2008 2007 18,97,840 – 2,85,431 1,17,716

1,91,79,074 6,38,761 1,78,08,689 1,11,306

14,94,693

18,97,840

In fiscal 2007, the Company has accelerated the vesting of 5,72,000 outstanding unvested options which were due to be vested in the normal course by October, 2007. The aggregate options considered for dilution are set out in Note 24.2.17.

Infosys BPO’s 2002 Plan

Particulars Net profit As reported Less: Stock-based employee compensation expense Adjusted pro forma Basic earnings per share as reported Pro forma basic earnings per share Diluted earnings per share as reported Pro forma earnings per share as reported

The activity in Infosys BPO’s 2002 Plan for the year ended March 31, 2008 and 2007: Year ended March 31, 2008 2007 2,200 – – 2,200

24,52,330 5,93,300 8,15,822 4,90,516

–

17,37,092

–

2,200

Pro forma Accounting for Stock Option Grants Guidance note on “Accounting for employee share based payments” issued by the Institute of Chartered Accountants of India establishes financial accounting and reporting principles for employee share based payment plans. The guidance note applies to employee share based payment plans, the grant date in respect of which falls on or after April 1, 2005. As allowed by the guidance note, Infosys has elected to continue to apply the intrinsic value-based method of accounting described above, and has adopted the disclosure requirements of the guidance note “Accounting of employee share based premiums”. Had the compensation cost for Infosys’ stock-based compensation plan been

Year ended March 31, 2008 2007 4,659

3,856

13 4,646

12 3,844

81.53

69.22

81.31

69.00

81.26

67.70

81.04

67.49

The fair value of each option under the Infosys BPO Employee Stock Options Plan (ESOP) is estimated on the date of grant using the Black-Scholes model with the following assumptions: Particulars

Infosys BPO’s 2002 Plan provides for the grant of stock options to employees of Infosys BPO and was approved by the Board of Directors and stockholders in June 2002. All options under the 2002 Plan are exercisable for equity shares. The 2002 Plan is administered by a compensation committee comprising three members, all of who are directors of Infosys BPO. The 2002 Plan provides for the issue of 52,50,000 equity shares to employees, at an exercise price, which shall not be less than the Fair Market Value (“FMV”) on the date of grant. Options may also be issued to employees at exercise prices that are less than the FMV only if specifically approved by the members of the Company in the general meeting. The options issued under the 2002 Plan vest in periods ranging between one through six years, although accelerated vesting based on performance conditions is provided in certain instances.

Number of options granted, exercised, and forfeited Options outstanding, beginning of period Granted Less: Exercised Forfeited Purchased by Infosys / Swapped with Infosys options Options outstanding, end of period

determined in a manner consistent with the fair value approach described in guidance note, the Company’s net income and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

Dividend yield % Expected life Risk free interest rate Volatility

Year ended March 31, 2008 2007 – – – 1-6 years – 7.6-8.1% – 50%

The fair value of each option under the Infosys 1999 (ESOP) is estimated on the date of grant using the Black-Scholes model with the following assumptions: Particulars Dividend yield % Expected life Risk free interest rate Volatility

Year ended March 31, 2008 2007 – 0.20% – 2-6 years – 7-7.3% – 34-54%

The Finance Act, 2007 included Fringe Benefit Tax (FBT) on Employee Stock Option Plan (ESOP). FBT liability crystallizes on the date of exercise of stock options. During the year ended March 31, 2008, 7,85,896 equity shares were issued pursuant to the exercise of stock options by employees under both the 1998 and 1999 stock option plans. During the year ended March 31, 2008, FBT on exercise of stock options of Rs. 2 crore has been paid by the Company and subsequently recovered from the employees. Consequently, there is no impact on the profit and loss account.

24.2.8 Income taxes The provision for taxation is the tax liability in India on the Company’s worldwide income. The tax has been computed on the worldwide income as reduced by exempt income in India and related tax credit in India for tax liabilities arising on overseas income sourced from those countries. Most of the Company’s and all of Infosys BPO’s operations are conducted through Software Technology Parks (STPs). Income from STPs is tax exempt for the earlier of 10 years commencing from the fiscal year in which the unit commences software development or March 31, 2009. Infosys also has operations in Special Economic Zones (SEZs). Income from SEZs is fully tax exempt for the first five years, 50% exempt for the next five years and 50% exempt for another five years subject to fulfilling certain conditions. Pursuant to the amendments in the Indian Income Tax Act, the Company has calculated its tax liability after considering

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Minimum Alternate Tax (MAT). MAT liability can be carried forward and set off against the future tax liabilities. Accordingly, a sum of Rs. 175 crore is carried in “Loans and Advances” in the balance sheet as of March 31, 2008.

24.2.12 Holding of Infosys in its subsidiaries Name of the subsidiary

The tax provision for the year ended March 31, 2008 includes a net reversal of Rs. 121 crore for liability no longer required.

Infosys BPO*** Infosys Australia Infosys China Infosys Consulting Infosys Mexico Infosys BPO s.r.o*

24.2.9 Loans and advances in Rs. crore

Particulars Deposits with financial institutions and body corporate HDFC Limited GE Capital Services India Limited Life Insurance Corporation of India

As at March 31, 2008

1,000

2007

13

285

161

161 1,446

121 295

Mr. Deepak M. Satwalekar, Director, is also a Director of HDFC Limited. Except as director in this financial institution, he has no direct interest in any transactions. Deposit with Life Insurance Corporation of India represents the amount deposited to settle employee benefit / leave obligations as and when they arise during the normal course of business.

24.2.10 Fixed assets Profit / loss on disposal of fixed assets during the year ended March 31, 2008 and 2007 is less than Rs. 1 crore and accordingly disclosed in Note 24.3. The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of these agreements, the Company has the option to purchase the properties on expiry of the lease period. The Company has already paid 99% of the value of the properties at the time of entering into the lease-cum-sale agreements. These amounts are disclosed as “Land – leasehold” under “Fixed assets” in the financial statements. Additionally, certain land has been purchased for which the Company has possession certificate for which sale deeds are yet to be executed as at March 31, 2008.

24.2.11 Details of investments Details of investments in and disposal of securities for the year ended March 31, 2008 and 2007: in Rs. crore

Particulars Investment in securities Liquid mutual funds Redemption / Disposal of investment in securities Liquid mutual funds Net movement in investment

P-Financial Services Holding B.V. Netherlands**

Year ended March 31, 2008 2007 2,045 2,045

4,500 4,500

1,998 1,998 47

5,228 5,228 (728)

Country of incorporation

Holding as at March 31,

India Australia China USA Mexico Czech Republic

2008 99.98% 100% 100% 100% 100%

2007 98.92% # 100% 100% 100% –

99.98%

98.92%

Netherlands

99.98%

–

Infosys BPO s.r.o is a wholly-owned subsidiary of Infosys BPO ** P-Financial Services Holding B.V. Netherlands is a wholly-owned subsidiary of Infosys BPO *** On December 8, 2006, the shareholders of Infosys BPO approved a buy-back of upto 12,79,963 equity shares at a fair market value of Rs. 604/- per equity share. The buy-back was in accordance with Section 77A of the Indian Companies Act, 1956. Pursuant to the buy-back offer Infosys BPO bought back 11,39,469 equity shares which were subsequently cancelled on December 29, 2006. As of March 31, 2008 Infosys holds 99.98% of the outstanding equity shares of Infosys BPO. # Excludes deferred purchase of share from shareholders of Infosys BPO of 3,60,417 shares *

On October 1, 2007, Infosys BPO acquired 100% of the equity shares of P-Financial Services Holding B.V. Netherlands and its subsidiaries. This business acquisition was conducted by entering into a Sale and Purchase Agreement with Koninklijke Philips Electronics NV (Philips), a company incorporated under the laws of Netherland, for acquiring the shared service centres of Philips for finance, accounting (F&A) and procurement business in Poland, Thailand and India (Philips BPO) for a consideration of Rs. 107 crore. The transaction was completed during the fiscal year and accounted as a business combination which resulted in a goodwill of Rs. 83 crore.

Investment in Infosys Mexico On June 20, 2007 the Company incorporated a wholly-owned subsidiary, Infosys Technologies S. de R.L. de C.V. in Mexico (“Infosys Mexico”). As of March 31, 2008, the Company has invested an aggregate of Mexican Peso 60 million (Rs. 22 crore) in the subsidiary.

Investment in Infosys BPO Buyback of shares and options In January 2007, the Company initiated the purchase of all the shares and outstanding options in Infosys BPO from its shareholders and option holders comprising current and former employees of Infosys BPO. The shareholders were given a choice to sell their shares at fair market value and the option holders were given the choice to sell their options and / or swap Infosys BPO options for Infosys options at a swap ratio based on fair market value. Consequent to this proposal, Infosys had paid an aggregate of Rs. 71 crore for the purchase of shares and options and had granted 1,51,933 Infosys options under the 1999 plan valued at fair value of Rs. 12 crore. Accordingly, the investment in Infosys BPO had increased by Rs. 83 crore and reserves had increased by Rs. 12 crore in March 2007. In February 2008, Infosys paid an aggregate of Rs. 22 crore to complete the deferred purchase of 3,60,417 shares from certain employees of Infosys BPO. Consequent to this purchase, Infosys holding in Infosys BPO increased to 99.98% as at March 31, 2008.

Investment in Infosys Consulting During the year ended March 31, 2008, the Company invested US $20 million (Rs. 81 crore) in its wholly owned subsidary Infosys Consulting, Inc. As of March 31, 2008, the Company has invested an aggregate of US $40 million (Rs. 171 crore) in the subsidiary.

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24.2.13 Provision for doubtful debts Periodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could affect the customer’s ability to settle. The Company normally provides for debtor dues outstanding for 180 days or longer as at the balance sheet date. As at March 31, 2008, the Company has provided for doubtful debts of Rs. 20 crore (Rs. 7 crore as at March 31, 2007) on dues from certain customers although the outstanding amounts were less than 180 days old, since the amounts were considered doubtful of recovery. The Company pursues the recovery of the dues, in part or full.

24.2.14 Segment reporting The Group’s operations predominantly relate to providing end-to-end business solutions, that leverage technology thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers. The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. These are as set out in the note on significant accounting policies.

Industry segments

Industry segments at the Group are primarily financial services comprising customers providing banking, finance and insurance services; manufacturing companies; companies in the telecommunications and the retail industries; and others such as utilities, transportation and logistics companies. Income and direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainder of the costs are categorized in relation to the associated turnover of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably. The Group believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as “unallocated” and directly charged against total income. Fixed assets used in the business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made. Customer relationships are driven based on the location of the respective client. North America comprises the United States of America, Canada, and Mexico; Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom; and the rest of the world comprising all other places except those mentioned above and India. Geographical revenues are segregated based on the location of the customer who is invoiced or in relation to which the revenue is otherwise recognized.

Geographical segments

Year ended March 31, 2008 and 2007:

Year ended March 31, 2008 and 2007: in Rs. crore

Particulars Financial Manufact- Telecom Retail Others Total services uring Revenues 5,972 2,454 3,597 1,971 2,698 16,692 5,209 1,877 2,679 1,394 2,734 13,893 Identifiable operating expenses 2,449 1,077 1,308 821 1,108 6,763 2,216 786 1,021 570 1,100 5,693 Allocated expenses 1,679 690 1,011 553 758 4,691 1,429 514 735 382 749 3,809 Segmental operating income 1,844 687 1,278 597 832 5,238 1,564 577 923 442 885 4,391 Unallocable expenses 598 514 Operating income 4,640 3,877 Other income (expense), net 704 370 Net profit before taxes and exceptional items 5,344 4,247 Income taxes 685 386 Net profit after taxes and before exceptional items 4,659 3,861 Income from sale of investments (net of taxes) – 6 Net profit after taxes, exceptional items and before minority interest 4,659 3,867

in Rs. crore

Particulars

Revenues Identifiable operating expenses Allocated expenses Segmental operating income

North Europe America

India

Rest Total of the world 1,441 16,692 1,212 13,893

10,349 8,802

4,683 3,664

219 215

4,371 3,775 2,909 2,413

1,809 1,437 1,316 1,005

45 55 62 59

538 426 404 332

6,763 5,693 4,691 3,809

3,069 2,614

1,558 1,222

112 101

499 454

5,238 4,391 598 514 4,640 3,877 704 370 5,344 4,247 685 386 4,659 3,861 – 6

Unallocable expenses Operating income Other income (expense), net Net profit before taxes and exceptional items Income taxes Net profit after taxes and before exceptional items Income from sale of investments (net of taxes) Net profit after taxes, exceptional items and before minority interest

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24.2.15 Dividends remitted in foreign currencies

24.2.19 Exceptional items

The Company remits the equivalent of the dividends payable to the holders of ADS (“ADS holders”) in Indian Rupees to the depository bank, which is the registered shareholder on record for all owners of the Company’s ADSs. The depository bank purchases the foreign currencies and remits dividends to the ADS holders.

During the year ended March 31, 2005 the Company sold its entire investment in Yantra Corporation, USA (Yantra) for a total consideration of US $12.57 million. An amount of Rs. 49 crore representing 90% of the consideration was received by the Company and the balance amount was deposited in Escrow to indemnify any contractual contingencies. During the year ended March 31, 2007, the Company received the balance amount of Rs. 5 crore on fulfillment of the Escrow obligations. Since the carrying value of the investment is nil, the entire proceeds of Rs. 5 crore (net of taxes, as applicable) had been recognized in the profit and loss account as an exceptional item.

Particulars of dividends remitted: in Rs. crore

Particulars

Interim dividend for Fiscal 2008 Interim dividend for Fiscal 2007 Final dividend for Fiscal 2007 Silver jubilee special dividend* Final dividend for fiscal 2006*

Number of Year ended March 31, shares to which the dividends relate 2008 2007 10,92,19,011

66

–

7,76,06,280

–

39

10,92,18,536

71

–

7,70,94,270

–

116

7,70,94,270

–

33

Adjusted for bonus issue

*

24.2.16 Provisions for investments The Company evaluates all investments for any diminution in their carrying values that is other than temporary. The Company made a provision of Rs. Nil during the year ended March 31, 2008 (Nil for the year ended March 31, 2007) on trade investments. The Company provided Rs. Nil and Rs. 1 crore during the year ended on March 31, 2008 and March 31, 2007 respectively, on revision of the carrying amount of non-trade current investments to fair value.

Redemption of preference shares On September 7, 2007 the Company realised Rs. 0.36 crore on redemption of preference shares in M-Commerce Ventures Pte. Limited, Singapore (“M-Commerce”). There were no such transactions in the year ended March 31, 2007.The entire investment in M-Commerce was fully provided for in earlier years. Accordingly, the realised gain was taken to the profit and loss account and provision written back.

24.2.17 Reconciliation of basic and diluted shares used in computing earnings per share Particulars Number of shares considered as basic weighted average shares outstanding Add: Effect of dilutive issues of shares / stock options Number of shares considered as weighted average shares and potential shares outstanding

Year ended March 31, 2008 2007

57,13,98,340 55,68,52,339 19,08,547

1,24,90,355

57,33,06,887 56,93,42,694

24.2.18 Intellectual Property Rights Infosys was liable to pay Aeronautical Development Agency (ADA) a maximum amount of Rs. 20 crore (US $4.4 million) by June 12, 2012 through a revenue sharing arrangement towards acquisition of Intellectual Property Rights in AUTOLAY, a commercial software application product used in designing high performance structural systems. During the quarter ended December 31, 2006, Infosys foreclosed the arrangement by paying the net present value of the future revenue share amounting to Rs. 13.5 crore (US $3 million). The remainder of the liability amounting to Rs. 6.5 crore (US $1.4 million) has been written back and disclosed in other income.

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During the year ended March 31, 2007, the Company received Rs. 1 crore from CiDRA Corporation towards redemption of shares on recapitalization. The remainder of investment was written off against provision made earlier.

24.2.20 Gratuity plan Effective April 1, 2006 the Company adopted the revised accounting standard on employee benefits. Pursuant to the adoption, the transitional obligations of the Company amounted to Rs. 9 crore. As required by the standard, the obligation has been recorded with the transfer of Rs. 9 crore to general reserves during the financial year ended March 31, 2007. The following table sets out the status of the gratuity plan as required under AS 15. Reconciliation of opening and closing balances of the present value of the defined benefit obligation: in Rs. crore

Particulars Obligations at period beginning Service cost Interest cost Actuarial (gain) / loss Benefits paid Amendment in benefit plan Obligations at period end Defined benefit obligation liability as at the balance sheet date is wholly-funded by the Company Change in plan assets Plan assets at period beginning, at fair value Expected return on plan assets Actuarial gain / (loss) Contributions Benefits paid Plan assets at period end, at fair value Reconciliation of present value of the obligation and the fair value of the plan assets Fair value of plan assets at the end of the period Present value of the defined benefit obligations at the end of the period Asset recognized in the balance sheet Assumptions Interest rate Estimated rate of return on plan assets

As at March 31, 2008 225 50 17 (8) (23) (37) 224

2007 183 45 14 (1) (16) – 225

225 18 2 14 (23)

170 16 3 54 (18)

236

225

236

225

224

225

12

–

7.92%

7.99%

7.92%

7.99%

in Rs. crore

Particulars

Year ended March 31, 2008 2007

Gratuity cost for the period Service cost Interest cost Expected return on plan assets Actuarial (gain) / loss Amortizations (reduction in benefits) Net gratuity cost Investment details of plan assets 100% of the plan assets are invested in debt instruments Assumptions Interest rate Estimated rate of return on plan assets

50 16 (18) (10)

45 14 (16) (3)

(4) 34

– 40

7.92%

7.99%

7.92%

7.99%

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by Rs. 37 crore, which is being amortized on a straight line basis to the profit and loss account over 10 years representing the average future service period of the employees. The unamortized liability as at March 31, 2008 amounted to Rs. 33 crore. Consequently the reduction in obligation has resulted in excess Plan Assets over the Plan obligations and accordingly a gratuity asset of Rs. 12 crore has been recorded in the books.

24.2.21 Provident Fund

Those items which were not represented in the financial statement due to rounding off to the nearest Rupees crore are given below:

Balance sheet items in Rs. crore

Schedule Description 3

7 8 10

24.2.22.b Restricted cash Deposits with financial institutions and body corporate as at March 31, 2008 include an amount of Rs. 161 crore (Rs. 132 crore as at March 31, 2007) deposited with Life Insurance Corporation of India to settle employee benefit / leave obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and is hence not considered “cash and cash equivalents”.

24.3

Details of rounded off amounts

The financial statements are represented in Rupees crore as per the approval received from Department of Company Affairs (DCA) earlier.

1.18

0.33

146.47 129.24 0.05

0.35 0.15 –

0.55

0.31

0.03 0.08

– 0.06

12.00

0.01

0.30

– in Rs. crore

Schedule Description

Profit and loss 12

24.2.22 Cash flow statement The balance of cash and cash equivalents includes Rs. 2 crore as at March 31, 2008 (Rs. 2 crore as at March 31, 2007) set aside for payment of dividends.

Fixed assets Additions Vehicles Deductions / retirements Plant and machinery Furniture and fixtures Vehicles Depreciation Vehicles Depreciation on assets sold during the period Vehicles Cash on hand Unsecured, considered doubtful Advance to gratuity trust Provision Gratuity payable

Profit & loss account items

The Guidance Note on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed, be considered as defined benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the Company’s actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly, the Company is unable to exhibit the related information.

24.2.22.a Unclaimed dividend

As at March 31, 2008 2007

13

Provision for investment Selling and marketing expenses Staff welfare Printing and stationery Office maintenance Consumables Software for own use Computer maintenance Insurance charges Rates and taxes Miscellaneous expenses Sales promotion expenses Communication expenses General and administration expenses Staff welfare Guesthouse maintenance Provision for doubtful loans and advances Commission to non-whole-time directors Auditors’ remuneration Statutory audit fees Out-of-pocket expenses Certification charges Others Bank charges and commission Freight charges Transaction processing fee and filing fee

Year ended March 31, 2008 2007 (0.36) 2.21

2.74 1.37 0.42 0.28 0.12 0.03 0.20 0.03 1.03 2.32 2.11

3.25 1.40 0.25 0.30 0.42 0.08 0.10 – – 2.32 0.96

0.55 2.16

– –

0.56

1.16

4.08

1.63

1.27 0.04 0.11 0.11 1.45 1.01

0.90 0.04 0.01 (0.02) 1.48 0.65

_

1.35

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Schedule Description

24.2.1

Aggregate expenses Provision for doubtful loans and advances Auditors’ remuneration Statutory audit fees Certification charges Out-of-pocket expenses Others Bank charges and commission Sales promotion expenses Freight charges Guesthouse maintenance Commission to non-whole-time directors Transaction processing fee and filing fee

24.2.10

24.2.16

Year ended March 31, 2008 2007

0.56

1.16

1.27 0.11 0.04 0.11 1.45 2.32 1.01 2.16

0.90 0.01 0.04 (0.02) 1.18 2.32 0.65 –

4.08

1.63

–

1.35

Profit on disposal of fixed assets, included in miscellaneous income Loss on disposal of fixed assets, included in miscellaneous expenses Minority interest

0.21

0.17

(0.01) 1.21

(0.05) 11.00

Provision for investments

(0.36)

2.21

Cash Flow Statement Items in Rs. crore

Schedule

Description

Cash flow Profit / loss on sale of fixed assets statement Provisions for investments Proceeds on disposal of fixed assets

Year ended March 31, 2008 2007 0.21 0.12 (0.36) 2.21 0.47

Transactions with key management personnel Key management personnel comprise directors and statutory officers. Particulars of remuneration and other benefits provided to key management personnel during the year ended March 31, 2008 and 2007 are as follows: in Rs. crore

Name

Salary Contributions Perquisites Total to provident and remuneand other incentives ration funds

Chairman and Chief Mentor N. R. Narayana Murthy*

– 0.06

– 0.02

– 0.21

– 0.29

0.21 0.05 0.16 0.04 Chief Executive Officer and Managing Director S. Gopalakrishnan 0.21 0.05 0.16 0.04 Chief Operating Officer S. D. Shibulal 0.20 0.05 0.13 0.04 Whole-time directors K. Dinesh 0.21 0.05 0.13 0.04 T. V. Mohandas Pai 0.33 0.11 0.24 0.08 Srinath Batni 0.31 0.08 0.20 0.04 Chief Financial Officer V. Balakrishnan 0.26 0.08 0.17 0.05

0.56 0.33

0.82 0.53

0.55 0.34

0.81 0.54

0.53 0.29

0.78 0.46

0.56 0.33 1.36 0.60 0.88 0.50

0.82 0.50 1.80 0.92 1.27 0.74

0.70 0.56

0.63 0.78

Co-Chairman Nandan M. Nilekani

* Whole-time director till August 20, 2006

Particulars of remuneration and other benefits paid to key management personnel during the year ended March 31, 2008 and 2007:

0.70

in Rs. crore

Name

Commi- Sitting ReimburseTotal ssion fees ment Remuneof expenses ration Non-whole-time directors Deepak M. Satwalekar 0.56 – 0.01 0.57 0.23 – – 0.23 Prof. Marti G. Subrahmanyam 0.47 – 0.12 0.59 0.21 – 0.11 0.32 Dr. Omkar Goswami 0.44 – 0.01 0.45 0.19 – 0.02 0.21 Sen. Larry Pressler – – – – 0.04 – 0.03 0.07 Rama Bijapurkar 0.44 – 0.01 0.45 0.21 – 0.01 0.22 Claude Smadja 0.42 – 0.20 0.62 0.21 – 0.20 0.41 Sridar A. Iyengar 0.55 – 0.09 0.64 0.33 0.01 0.13 0.47 Prof. Jeffrey S. Lehman 0.43 – 0.02 0.45 0.18 – – 0.18 David L. Boyles 0.47 – – 0.47 0.21 – – 0.21 0.50 – – 0.50 N. R. Narayana Murthy* 0.14 – – 0.14 * Appointed as additional director effective August 21, 2006

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Risk management report “Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.” – John Allen Paulos in his book A Mathematician Plays the Stock Market

The following report sets out the enterprise-wide risk management that we practice. Readers are cautioned that the risks outlined here are not exhaustive and are for information purposes only. The report may contain forward-looking statements. Our business model is subject to uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Readers are requested to exercise their own judgment in assessing the risks associated with the Company, and refer to the discussions of risks in the Company’s previous annual reports and the filings with the U.S. Securities and Exchange Commission.

Overview and approach to risk management We face changes in the business environment from time to time that necessitate continuous evaluation and management of significant risks faced by us. The Enterprise Risk Management (ERM) program at Infosys aims toward appropriately evaluating and managing risks holistically, so as to enable the organization to meet or exceed the expectations of multiple stakeholders. The program seeks to eliminate negative surprises that may affect the achievement of our business objectives and impact our stakeholders’ expectations. Further, effective risk management practices at Infosys are geared toward sustaining and enhancing our competitive advantage. Risk management is embedded into our fundamental business model described as ‘Predictable, Sustainable, Profitable, and De-risked’ (PSPD). We seek long-term relationships that allow us to grow more predictably. We eschew excessive pursuit of short-term and tactical opportunities for sustainable business opportunities, generated through deep client relationships.

Our Risk Management Framework encompasses the relationship between the risk and the reward, factoring in stakeholders’ expectations. Our risk management practices seek to maximize business returns while keeping risks within reasonable boundaries. The practices are oriented to evaluate relevant risks, and decide the appropriate action(s), for either eliminating or mitigating the risk impact, or toward recovering from the risk event. The risk mitigation strategy and action plan in most cases is based on commercial considerations; evaluating costs of the various options available to address the risk against the possible business benefits.

Risk management landscape at Infosys The risk management landscape consists of various risk-related initiatives and activities including the following: • Risk identification: A periodic or trigger-based assessment is undertaken to identify our significant risks and prioritize the risks for action. This assessment is based on a risk perception survey, business environment scanning, and inputs from key stakeholders. • Risk measurement and control: The key risks are tracked and risk mitigation and control activities are defined, to align the risk exposure levels to the risk appetite. Owners are identified for mitigation and control measures. • Risk reporting: Periodic reporting on the identified risks is an integral part of the risk management process at Infosys. Besides risk reporting, and control functions embedded in the business operations of each unit and function, the identified material risks are reported to the Risk Council periodically . Further, a quarterly report is presented to the Risk Management Committee, which additionally reviews the ERM program, the status, and trends available on the material risks highlighted.

Organization of the risk management function Risk management at Infosys spans across the enterprise at various levels, from Infoscions through to Board oversight. These levels also form the various lines of defense in risk management at Infosys. The roles and responsibilities regarding risk management at Infosys are summarized below: Level Board of Directors Risk Management Committee

Role • Oversees risk management performed by the Executive Management • Comprises four independent directors: David L. Boyles, Chairperson Claude Smadja Prof. Marti G. Subrahmanyam Sridar A. Iyengar • Oversees risk management on behalf of the Board

Risk Council

• Makes recommendations on the risk management program • Comprises the CEO, COO and CFO • Formulates risk management guidelines and policies

Office of Risk Management

• Reviews enterprise risks periodically, initiates action and reviews progress • Comprises a network of risk managers from all businesses and support groups across the Infosys Group, and is led by the Chief Risk Officer (CRO)

Unit Heads

• Facilitates the execution of risk management in the enterprise as mandated by the Risk Council • Manage their functions as per our risk management philosophy

Infoscions

• Manage risks at the unit level, in consultation with the Risk Council • Implement ascribed risk actions • Provide feedback on the efficacy of risk management and warnings for early detection of risk events

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Risk Management Framework Our Risk Management Framework encompasses risks under the following broad categories: • Strategy: Relates to the choices we make regarding the direction in which we lead the organization to enhance our competitive position. • Industry: Relates to the inherent characteristics of our industry, market and customers and the related challenges. • Counter-party: Relates to the risks arising from our association with parties for conducting business, where the performance of such parties is not sufficient or not desirable to achieve our business objectives.

Key risk management activities conducted during the year • A risk perception survey was conducted with our top management, to prioritize the key risks faced by the Company. The survey was timed to coincide with the launch of the Annual Strategy Planning exercise, so that the perceived risk landscape and the resultant implications could be factored in the strategy. These were augmented further by focused discussions with key stakeholders, including the Risk Council members. • During the year, we further expanded and refined the process of risk profiling of the accounts. The system of risk profiling for accounts focused on relevant risks emanating from the risk categories of counter-party, resources, operations, and compliance. The pilot exercise tracked the performance of both the projects and the accounts for an extended period of time.

Our unified view of the risk universe

• Resources: Relates to the inability to achieve business objectives due to inappropriate sourcing or sub-optimal utilization of key organization resources such as talent and infrastructure. • Operations: Relates to ineffective execution of core business activities including service delivery to clients as well as internal business processes. This also includes business activity disruptions arising out of external and internal factors including threat to physical security and information security. • Compliance: Relates to inadequate compliance with existing or new regulations, inappropriate conduct of contractual obligation and inadequate safeguard of Intellectual Property leading to litigation or loss of reputation. The secondary risk categorizations that are more detailed are set out below. The sub-classification allows us to rapidly identify where we are likely to face the potential impact of the identified risk.

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Power of talent

• In the context of our constant endeavor to strengthen security measures across all operational centers, an external agency was authorized to conduct a physical security audit for our Bangalore facility. We have analyzed the key findings of the audit and have started a phased-implementation of the recommendations made. • During the year, an improved risk heat map utilizing predictive measures was designed. The leading indicators forming the core of the predictive measures help to measure the extent of exposure, and also the net effect of the mitigation strategies pursued. This approach has been adopted for both evaluating and reporting on all material risks for us. This will be implemented during the next fiscal year, and will also include any new material risks that may emerge in the year. • Our risk management team interacted with risk teams from various global corporates during the year to exchange ideas and share best practices.

Corporate governance report “Corporate governance is about working ethically and finding a balance between economic and social goals. It includes the ability to function profitably while obeying laws, rules and regulations.” Smt. Pratibha Devisingh Patil, Hon. President of India, during the Lakshmipat Singhania–IIM Lucknow National Leadership Awards 2007 ceremony, New Delhi, February 12, 2008 In the last decade, two events significantly contributed to making corporate governance nearly a household term. The first was the wave of financial crises in Russia, Asia, and Brazil in 1998, when the activities of the corporate sector influenced entire economies and the global financial system. Three years later, the corporate scandals in the U.S. had highlighted the macroeconomic consequences of weak corporate governance systems. In the aftermath, economists, the corporate world, and policy makers everywhere began to recognize the importance of corporate governance. The traditional analysis of corporate governance focused on the allocation of power and duty among the Board of Directors, management, and shareholders. As the sole residual claimants on company assets, shareholders were presumed to have the most incentive to maximize company value. According to that perspective, the Board of Directors acted as the shareholders’ agent and management was responsible for daily operations. In today’s scenario, the Board and the Management play the role of trustees. Effective corporate governance requires a clear understanding of the respective roles of the Board and the senior management, and their relationships with others in the corporate structure. The relationship of the Board and the Management with stockholders should be characterized by candor; their relationship with employees should be characterized by fairness; their relationship with the communities in which they operate should be characterized by good citizenship; and their relationship with the government should be characterized by a commitment to compliance. We believe that sound corporate governance is critical to enhance and retain stakeholders’ trust. Accordingly, we always seek to ensure that we attain our performance rules with integrity. Our Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures always seek to attain best practices in international corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions. Our corporate governance philosophy is based on the following principles: • Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards should go beyond the law • Be transparent and maintain a high degree of disclosure levels. When in doubt, disclose • Make a clear distinction between personal conveniences and corporate resources • Communicate externally, in a truthful manner, about how the Company is run internally • Comply with the laws in all the countries in which we operate • Have a simple and transparent corporate structure driven solely by business needs • Management is the trustee of the shareholders’ capital and not the owner

The Board of Directors is at the core of our corporate governance practice and oversees how the Management serves and protects the long-term interests of all our stakeholders. We believe that an active, well-informed and independent Board is necessary to ensure highest standards of corporate governance. The majority of our Board, 8 out of 15, are independent members. Further, we have audit, compensation, investor grievance, nominations, and risk management committees, which comprise only independent directors. As a part of our commitment to follow global best practices, we comply with the Euroshareholders Corporate Governance Guidelines, 2000, and the recommendations of The Conference Board Commission on Public Trusts and Private Enterprises in the U.S. We also adhere to the UN Global Compact Programme. Further, a note on our compliance with the corporate governance guidelines of six countries – in their national languages – is presented elsewhere in the Annual Report.

Corporate governance ratings CRISIL CRISIL assigned us the “CRISIL GVC Level 1” rating. This Governance and Value Creation (GVC) rating indicates our capability to create wealth for all our stakeholders while adopting sound corporate governance practices.

ICRA ICRA assigned “CGR 1” rating to our corporate governance practices. The rating is the highest on ICRA’s Corporate Governance Rating (CGR) scale of CGR1 to CGR 6. We are the first company in India to be assigned the highest CGR by ICRA. The rating reflects our transparent shareholding pattern, sound Board practices, interactive decision-making process, high level of transparency, and disclosures encompassing all important aspects of our operations, and our track record in investor servicing. A notable feature of our corporate governance practices is the emphasis on “substance” over “form,” besides our transparent approach to following such practices.

Corporate governance guidelines Over the years, the Board has developed corporate governance guidelines to help fulfill our corporate responsibility to various stakeholders. These guidelines ensure the Board will have the necessary authority and practices in place, to review and evaluate our operations when required. Further, these guidelines allow the Board to make decisions that are independent of the Management. The Board may change these guidelines from time to time to effectively achieve our stated objectives.

A. Board composition Size and composition of the Board The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and to separate the Board functions of governance and management. The Board consists of 15 members, 6 of who are executive or full-time directors, one is non-executive and 8 are independent directors. Four of the executive directors are our founders. The Board believes that the current size is appropriate, based on our present circumstances. The Board periodically evaluates the need for change in composition of its size.

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Composition of the Board, and directorships held during fiscal 2008 Name of the director

Age

India listed companies#

All companies around the world##

Committee membership###

Chairperson of committees###

61

1

6

–

–

52 53 53 53

– – – –

3 2 4 3

– – 1 –

– – – –

49 53

– –

4 3

2 –

1 –

59 61 51 51 62 60 59 52

5 1 6 4 – 2 – –

9

3 1 9 4 1 5 1 1

2 – 2 1 – 3 – –

Founder and Non-Executive Director N. R. Narayana Murthy

Founders and Whole-time Directors Nandan M. Nilekani S. Gopalakrishnan S. D. Shibulal K. Dinesh

Whole-time Directors T. V. Mohandas Pai Srinath Batni

Independent Directors Deepak M. Satwalekar Prof. Marti G. Subrahmanyam Dr. Omkar Goswami Rama Bijapurkar Claude Smadja Sridar A. Iyengar David L. Boyles Prof. Jeffrey S. Lehman

9 10 4 9 3 1

Note: None of the directors are related to each other. # Excluding directorship in Infosys Technologies Limited and its subsidiaries ## Directorships in companies around the world (listed & unlisted) including Infosys Technologies Limited and its subsidiaries ### As required by Clause 49 of the Listing Agreement, the disclosure includes memberships / chairpersonship of audit committee and investor grievance committee in public companies (listed and unlisted).

Responsibilities of the Chairman, Co-Chairman, CEO and the COO Our current policy is to have a Non-Executive Chairman and Chief Mentor – N. R. Narayana Murthy; a Co-Chairman – Nandan M. Nilekani, a Chief Executive Officer (CEO) and Managing Director – S. Gopalakrishnan; and Chief Operating Officer (COO) – S. D. Shibulal. There are clear demarcations of responsibility and authority among these officials. • The Chairman and Chief Mentor is responsible for mentoring our core management team in transforming us into a world-class, next-generation organization that provides state-of-the-art, technology-leveraged business solutions to corporations across the world. He also interacts with global thought leaders to enhance our leadership position. In addition, he continues to interact with various institutions to highlight and help bring about the benefits of IT to every section of society. As Chairman of the Board, he is also responsible for all Board matters. • The Co-Chairman of the Board focusses on key client relationships, deals with broader industry issues, provides global thought leadership, leads transformation initiatives, contributes to strategy, and is a brand ambassador. • The CEO and Managing Director is responsible for corporate strategy, brand equity, planning, external contacts and other management matters. He is also responsible for achieving the annual business plan and acquisitions. • The COO is responsible for all customer service operations. He is also responsible for technology, new initiatives and investments.

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The Co-Chairman, CEO, COO, the other executive directors and the senior management make periodic presentations to the Board on their responsibilities, performance and targets.

Board definition of independent directors According to Clause 49 of the Listing Agreement with Indian stock exchanges, an independent director means a person other than an officer or employee of the Company or its subsidiaries or any other individual having a material pecuniary relationship or transactions with the Company which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. We adopted a much stricter definition of independence than required by the NASDAQ listing rules and the Sarbanes-Oxley Act, U.S. The same is provided in the Audit committee charter section of this Annual Report.

Lead independent director Deepak M. Satwalekar is the lead independent director. He represents and acts as spokesperson for the independent directors as a group, and is responsible for the following activities: • Presiding over all executive sessions of the Board’s independent directors • Working closely with the Chairman, Co-Chairman and the CEO to finalize the information flow, meeting agendas and meeting schedules • Liaising between the Chairman, Co-Chairman, CEO and the independent directors on the Board, and • Along with the Chairman and Co-Chairman, taking a lead role in the Board evaluation process.

Board membership criteria The nominations committee works with the entire Board to determine the appropriate characteristics, skills and experience required for the Board as a whole as well as its individual members. Board members are expected to possess the expertise, skills and experience required to manage and guide a high-growth, high-tech software company, deriving revenue primarily from G-7 countries. Expertise in strategy, technology, finance, quality and human resources is essential. Generally, the members will be between 40 and 60 years of age, and will not be related to any executive directors or independent directors. They are generally not expected to serve in any executive or independent position in any company that is in direct competition with us. Board members are expected to rigorously prepare for, attend, and participate in all Board and applicable committee meetings. Each member is expected to ensure that their other current and planned future commitments do not materially interfere with their responsibility as our director.

Selection of new directors The Board is responsible for the selection of new directors. The Board delegates the screening and selection process involved in selecting new directors to the nominations committee, which consists exclusively of independent directors. The nominations committee in turn makes recommendations to the Board on the induction of any new directors.

Membership term The Board constantly evaluates the contribution of the members and periodically makes recommendations to the shareholders about re-appointments as per statute. The current law in India mandates the retirement of one-third of the Board members (who are liable to retire by rotation) every year, and qualifies the retiring members for re-appointment. Executive directors are appointed by the shareholders for a maximum period of five years at a time, but are eligible for re-appointment upon completion of their term.

Non-executive / independent directors do not have a specified term, but retire by rotation as per law. The nominations committee of the Board recommends such appointments and re-appointments. However, the membership term is limited by the retirement age for members.

Retirement policy Under this policy, the maximum age of retirement for executive directors is 60 years, which is the age of superannuation for our employees. Their continuation as members of the Board upon superannuation / retirement is determined by the nominations committee. The age limit for serving on the Board is 65 years.

Succession planning The nominations committee constantly works with the Board to evolve succession planning for the positions of the Chairman, CEO, COO and CFO and also develops plans for interim succession for any of them, in case of an unexpected occurrence. The Board, if required, may review the succession plan more frequently.

Board compensation policy The compensation committee determines and recommends to the Board, the compensation payable to the directors. All Board-level compensation is approved by the shareholders, and separately disclosed in the financial statements. Remuneration of the executive directors consists of a fixed component and a performance incentive. The compensation committee makes a quarterly appraisal of the performance of the executive directors based on a detailed performance-related matrix. The annual compensation of the executive directors is approved by the compensation committee, within the parameters set by the shareholders at the shareholders’ meetings. The compensation payable to independent directors is limited to a fixed amount per year as determined and approved by the Board, the sum of which is within the limit of 1% of our net profits for the year, calculated as per the provisions of the Companies Act, 1956. The performance of independent directors is reviewed by the full Board on an annual basis. The compensation paid to independent directors and the method of calculation is disclosed separately in the financial statements.

Cash compensation paid to directors in fiscal 2008 in Rs. crore

Name of the director

Fixed salary Basic salary Perquisites / Retiral Allowances benefits

Total fixed salary

Bonus / Commission Incentives

Total

Notice period (in months)

Founder & Non-Executive Director N. R. Narayana Murthy

–

–

–

–

–

0. 50

0. 50

NA

0.21 0.21 0.20 0.21

0.06 0.06 0.06 0.07

0.05 0.05 0.05 0.05

0.32 0.32 0.31 0.33

0.49 0.49 0.47 0.49

– – – –

0.81 0.81 0.78 0.82

6 6 6 6

0.33 0.30

0.13 0.11

0.08 0.08

0.54 0.49

1.24 0.77

– –

1.78 1.26

6 6

– – – – – – – –

– – – – – – – –

– – – – – – – –

– – – – – – – –

– – – – – – – –

0.56 0.47 0.44 0.44 0.42 0.46 0.47 0.43

0.56 0.47 0.44 0.44 0.42 0.46 0.47 0.43

NA NA NA NA NA NA NA NA

Founders & Whole-time Directors Nandan M. Nilekani S. Gopalakrishnan S. D. Shibulal K. Dinesh

Whole-time Directors T. V. Mohandas Pai Srinath Batni

Independent Directors Deepak M. Satwalekar Prof. Marti G. Subrahmanyam Dr. Omkar Goswami Rama Bijapurkar Claude Smadja Sridar A. Iyengar David L. Boyles Prof. Jeffrey S. Lehman None of the above directors are eligible for any severance pay

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Shares and options held by non-executive / independent directors as on March 31, 2008

N. R. Narayana Murthy Deepak M. Satwalekar Prof. Marti G. Subrahmanyam Dr. Omkar Goswami Rama Bijapurkar Claude Smadja Sridar A. Iyengar David L. Boyles Prof. Jeffrey S. Lehman

Equity shares (No.) 31,79,672 56,000 23,000 12,300 20,000 3,298 10,000 – –

ADS (No.) – – 37,300 – – – – 2,000 –

The above options were issued at fair market value. The options granted will vest over a period of four years from the date of grant.

Non-Executive / Independent Directors’ remuneration Section 309 of the Companies Act, 1956 provides that a director who is neither in the whole-time employment of the Company nor a managing director may be paid remuneration by way of commission, if the Company, by special resolution, authorizes such payment. Members of the Company at the Annual General Meeting held on June 12, 2004, approved payment of remuneration by way of commission to non-executive directors, at a sum not exceeding 0.5% per annum of our net profits. We have paid Rs. 4.19 crore (US $10,47,500) as commission to our non-executive directors. The aggregate amount was arrived as per the following criteria: Fixed pay Variable pay* Chairperson of the Board Lead independent director Chairperson of audit committee Members of the audit committee Chairperson of other committees Members of other committees *

Based on the attendance at Board meetings

in Rs. crore 0.30 0.10 0.10 0.06 0.08 0.04 0.02 0.01

US $ 75,000 25,000 25,000 15,000 20,000 10,000 5,000 2,500 1 US $ = Rs. 40.02

At the meeting held on April 15, 2008, the Board further decided that effective April 1, 2008, independent directors based overseas and traveling to India to attend Board meetings will be eligible to receive an additional US $5,000 per meeting. The decision considers the fact that these independent directors have to spend at least two additional days in travel while attending board meetings in India. The Board believes that the above commission structure is commensurate with global best practices in terms of remunerating non-executive directors of a company of similar size and adequately compensates for the time and contribution made by the non-executive directors.

Memberships in other Boards Executive directors may, with the prior consent of the Chairperson of the Board of Directors, serve on the Board of one other business entity, provided that such a business entity is not in direct competition with our business operations. Executive directors are also allowed to serve on the Board of corporate or government bodies whose interests are germane to the future of the software business, or are key economic institutions of the nation, or whose prime objective is benefiting society. Independent directors are not expected to serve on the Boards of competing companies. Other than this, there are no limitations on them, save those imposed by law and good corporate governance practices. The outside directorships held by each of our directors are given in a table in this report.

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Stock options (1999 Plan) – – – – – 7,602 – – –

Grant price (Rs.) – – – – – 416. 71 – – –

Expiry date – – – – – July 9, 2011 – – –

B. Board meetings Scheduling and selection of agenda items for Board meetings Dates for Board meetings in the ensuing year are decided in advance and published as part of the Annual Report. Most Board meetings are held at our registered office at Electronics City, Bangalore, India. The Chairman of the Board and the Company Secretary draft the agenda for each meeting, along with explanatory notes in consultation with the lead independent director, and distribute these in advance to the directors. Every Board member is free to suggest items for inclusion in the agenda. The Board meets at least once a quarter to review the quarterly results and other items on the agenda, and also on the occasion of the annual shareholders’ meeting. Additional meetings are held, when necessary. Independent directors are expected to attend at least four Board meetings in a year. However, the Board being represented by independent directors from various parts of the world, it may not be possible for each one of them to be physically present at all the meetings. We effectively use video / teleconferencing facilities to enable their participation. Committees of the Board usually meet the day before the formal Board meeting, or when required, for transacting business. Five Board meetings were held during the year ended March 31, 2008. These were held on April 13, 2007; June 22, 2007 (coinciding with last year’s Annual General Meeting of the shareholders); July 11, 2007; October 11, 2007; and January 11, 2008.

Board meetings and the attendance of directors during fiscal 2008 Name of the director N. R. Narayana Murthy Nandan M. Nilekani S. Gopalakrishnan Deepak M. Satwalekar Prof. Marti G. Subrahmanyam Sridar A. Iyengar Dr. Omkar Goswami Rama Bijapurkar Claude Smadja David L. Boyles Prof. Jeffrey S. Lehman K. Dinesh S. D. Shibulal T. V. Mohandas Pai Srinath Batni

No. of meetings Held Attended 5 5 5 5 5 5 5 5 5 5 5 5 5 4 5 4 5 4 5 5 5 5 5 5 5 5 5 5 5 5

All of the above directors attended the annual general meeting held on June 22, 2007

Availability of information to Board members The Board has unfettered and complete access to any information within the Company, and to any of our employees. At Board meetings managers who can provide additional insights into the items being discussed are invited. The information regularly supplied to the Board includes: • Annual operating plans and budgets, capital budgets, and updates • Quarterly results of our operating divisions or business segments • Minutes of meetings of audit, compensation, nominations, risk management, and investor grievance committees as well as abstracts of circular resolutions passed. Also, Board minutes of the subsidiary companies

The Board, in consultation with the nominations committee, is responsible for constituting, assigning, co-opting and fixing terms of service for committee members, and it delegates these powers to the nominations committee. The Chairperson of the Board, in consultation with the Company Secretary and the committee chairperson, determine the frequency and duration of the committee meetings. Normally, all the committees meet four times a year. Recommendations of the committees are submitted to the full Board for approval. The quorum for meetings is either two members or one-third of the members of the committee, whichever is higher.

1. Audit committee Our audit committee comprises six independent directors. They are:

• General notices of interest



Deepak M. Satwalekar, Chairperson

• Dividend data



Prof. Marti G. Subrahmanyam

• Information on recruitment and remuneration of senior officers just below the Board level, including appointment or removal of the CFO and Company Secretary



Dr. Omkar Goswami



Rama Bijapurkar

• Materially important litigations, show cause, demand, prosecution and penalty notices



Sridar A. Iyengar



David L. Boyles

• Fatal or serious accidents, dangerous occurrences, and material effluent or pollution problems

In India, we are listed on The Bombay Stock Exchange, (BSE) and the National Stock Exchange (NSE). In the U.S., we are listed on the NASDAQ. In India, Clause 49 of the Listing Agreement makes it mandatory for listed companies to adopt an appropriate audit committee charter. The Blue Ribbon Committee set up by the U.S. Securities and Exchange Commission (SEC) recommends that every listed company adopt an audit committee charter. This recommendation has also been adopted by NASDAQ.

• Any materially relevant default in financial obligations to and by us or substantial non-payment for goods sold by us • Any issue that involves possible public or product liability claims of a substantial nature • Details of joint ventures, acquisitions of companies or collaboration agreements • Transactions that involve substantial payment toward goodwill, brand equity or intellectual property • Any significant development on the human resources front • Sale of material nature, of investments, subsidiaries and assets, which are not in the normal course of business • Details of foreign exchange exposure and the steps taken by the Management to limit risks of adverse exchange rate movement

In our meeting on May 27, 2000, our audit committee adopted a charter which meets the requirements of Clause 49 of the Listing Agreement with Indian stock exchanges and SEC. The charter is given below:

1.1 Audit committee charter 1.

Primary objective: The primary objective of the audit committee (the committee) of Infosys Technologies Limited (the Company) is to monitor and provide effective supervision of the Management’s financial reporting process with a view to ensure accurate, timely and proper disclosures, and transparency, integrity and quality of financial reporting.



The committee oversees the work carried out in the financial reporting process by the Management, the internal auditors and the independent auditor, and notes the processes and safeguards employed by each.

2.

Responsibilities:

• Non-compliance of any regulatory, statutory or listing requirements as well as shareholder services such as non-payment of dividend and delays in share transfer

Discussion with independent directors’ The Board’s policy is to regularly have separate meetings with independent directors to update them on all business-related issues and new initiatives. In such meetings, the executive directors and other members of the senior management make presentations on relevant issues. In addition, our independent directors meet periodically in an executive session, i.e. without the Chairperson, any of the executive directors or the Management.

Materially significant related party transactions There have been no materially significant related party transactions, monetary transactions or relationships between the Company and directors, management, subsidiary or relatives, except for those disclosed in the financial statements for the year ended March 31, 2008.

C. Board committees Currently, the Board has five committees: audit committee, compensation committee, nominations committee, investor grievance committee, and risk management committee. All committees consist entirely of independent directors.

2.1 Provide an open avenue of communication between the independent auditor, internal auditor, and the Board of Directors (BoD). 2.2 Meet at least four times every year, or more frequently as circumstances require. The audit committee may ask members of the Management or others to attend meetings and provide pertinent information as necessary. 2.3 Confirm and assure the independence of the independent auditor and objectivity of the internal auditor. 2.4 Appoint, compensate and oversee the work of the independent auditor (including resolving disagreements between Management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. 2.5 Review and pre-approve all related party transactions in the Company. For this purpose, the committee may designate a

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member who shall be responsible for pre-approving related party transactions.

2.17 Oversee and review, at least annually, the Company’s risk management policies, including its investment policies.

2.6 Review with the independent auditor the co-ordination of audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of all audit resources.

2.18 Review the Company’s compliance with employee benefit plans.

2.7 Consider and review the following with the independent auditor and the Management:

2.19 Oversee and review the Company’s policies regarding information technology and management information systems.

• The adequacy of internal controls including computerized information system controls and security, and

2.20 If necessary, institute special investigations with full access to all books, records, facilities and personnel of the Company.

• Related findings and recommendations of the independent auditor and internal auditor, together with the Management’s responses.

2.21 As appropriate, obtain advice and assistance from outside legal, accounting or other advisors.

2.8 Consider and, if deemed fit, pre-approve all non-auditing services to be provided by the independent auditor to the Company. For the purpose of this clause, “non-auditing services” shall mean any professional services provided to the Company by the independent auditor, other than those provided to the Company in connection with an audit or a review of the financial statements of the Company and includes (but is not limited to): • Bookkeeping or other services related to the accounting records of financial statements of the Company • Financial information system design and implementation

2.22 Review its own charter, structure, processes and membership requirements. 2.23 Provide a report in the Company’s proxy statement in accordance with the rules and regulations of the SEC. 2.24 Establish procedures for receiving, retaining and treating complaints received by the Company regarding accounting, internal accounting controls or auditing matters and procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. 2.25 Consider and review the following with the Management, internal auditor and the independent auditor:

• Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

• Significant findings during the year, including the status of previous audit recommendations,

• Actuarial services

• Any difficulties encountered during audit work including any restrictions on the scope of activities or access to required information, and

• Internal audit outsourcing services • Management functions or human resources

• Any changes required in the planned scope of the internal audit plan.

• Broker or dealer, investment advisor, or investment banking services • Legal services and expert services unrelated to the audit • Any other service that the BoD determines impermissible. 2.9 Review and discuss with the Management and the independent auditor, the annual audited financial statements and quarterly audited / unaudited financial statements, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, prior to filing the Company’s Annual Report on Form 20-F and quarterly results on Form 6-K, respectively, with the SEC.

2.26 Report periodically to the BoD on significant results of the foregoing activities. 3.

Composition: The committee shall consist solely of ‘‘independent’’ directors (as defined in (i) NASDAQ Rule 4200 and (ii) the rules of the Securities and Exchange Commission) of the Company and shall be comprise of a minimum of three directors. Each member will be able to read and understand fundamental financial statements, in accordance with the NASDAQ National Market Audit Committee requirements. They should be diligent, knowledgeable, dedicated, interested in the job and willing to devote a substantial amount of time and energy to the responsibilities of the committee, in addition to BoD responsibilities. At least one of the members shall be a “financial expert” as defined in Section 407 of the Sarbanes-Oxley Act. The members of the committee shall be elected by the BoD and shall continue until their successors are duly elected. The duties and responsibilities of a member are in addition to those applicable to a member of the BoD. In recognition of the time burden associated with the service and with a view to bringing in fresh insight, the committee may consider limiting the term of the audit committee service, by automatic rotation or by other means. One of the members shall be elected as the chairperson, either by the full BoD or by the members themselves, by majority vote.

4.

Relationship with independent and internal auditors:

2.10 Direct the Company’s independent auditor to review before filing with the SEC, the Company’s interim financial statements included in quarterly reports on Form 6-K, using professional standards and procedures for conducting such reviews. 2.11 Conduct a post-audit review of the financial statements and audit findings, including any significant suggestions for improvements provided to the Management by the independent auditor. 2.12 Review before release, the unedited quarterly operating results in the Company’s quarterly earnings release. 2.13 Oversee compliance with the requirements of the SEC and the Securities and Exchange Board of India (SEBI), as the case may be, for disclosure of auditors’ services and audit committee members, member qualifications and activities. 2.14 Review, approve and monitor the code of ethics that the Company plans for its senior financial officers. 2.15 Review Management’s monitoring of compliance with the Company’s standards of business conduct and with the Foreign Corrupt Practices Act. 2.16 Review, in conjunction with the counsel, any legal matters that could have a significant impact on the Company’s financial statements.

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4.1 The committee has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent auditor in accordance with the law. All possible measures must be taken by the committee to ensure the objectivity and independence of the independent auditor. These include: • Reviewing the independent auditors’ proposed audit scope, approach and independence

• The committee, in reliance on the review and discussions conducted with the Management and the independent auditors pursuant to the requirements above, believes that the Company’s financial statements are fairly presented in conformity with Generally Accepted Accounting Principles (GAAP) in all material respects, and

• Obtaining from the independent auditors periodic formal written statements delineating all relationships between the auditors and the Company consistent with applicable regulatory requirements and presenting this statement to the BoD • Actively engaging in dialogue with the auditors with respect to any disclosed relationships or services that may impact their objectivity and independence and / or recommend that the full BoD take appropriate action to ensure their independence • Encouraging the independent auditors to have open and frank discussions on their judgments about the quality, not just the acceptability, of the Company’s accounting principles as applied in its financial reporting. This covers issues such as the clarity of the Company’s financial disclosures, and degree of aggressiveness or conservatism of the Company’s accounting principles and underlying estimates, and other significant decisions made by the Management in preparing the financial disclosure and audited by them • Carrying out the attest function in conformity with U.S. Generally Accepted Auditing Standards (GAAS) to perform an interim financial review as required under Statement of Auditing Standards 71 of the American Institute of Certified Public Accountants and also discuss with the committee or its chairman, and an appropriate representative of Financial Management and Accounting, in person or by telephone conference call, the matters described in SAS 61, Communications with the Committee, as amended by SAS 90 Audit Committee Communication prior to the Company’s filing of its Form 6-K (and preferably prior to any public announcement of financial results), including significant adjustments, management judgment and accounting estimates, significant new accounting policies, and disagreements with Management • Reviewing reports submitted to the audit committee by the independent auditor in accordance with the applicable SEC requirements. 4.2 The internal auditors of the Company are in the best position to evaluate and report on the adequacy and effectiveness of the internal controls. Keeping in view the need for the internal auditors’ independence from the Management to remain objective, a formal mechanism should be created to facilitate confidential exchanges between the internal auditors and the committee, regardless of irregularities or problems. The work carried out by each of these auditors needs to be assessed and reviewed with the independent auditors and appropriate recommendations made to the BoD. 5.

Disclosure requirements:

5.1 The committee charter should be published in the Annual Report once every three years and also whenever any significant amendment is made to the charter. 5.2 The committee shall disclose in the Company’s Annual Report whether or not, with respect to the concerned fiscal year: • The Management has reviewed the audited financial statements with the committee, including a discussion of the quality of the accounting principles as applied, and significant judgments affecting the Company’s financial statements • The independent auditors have discussed with the committee their judgments of the quality of those principles as applied and judgments referred to above under the circumstances • The members of the committee have discussed among themselves, without the Management or the independent auditors being present, the information disclosed to the committee as described above

• The committee has satisfied its responsibilities in compliance with its charter. 5.3 The committee shall secure compliance that the BoD has affirmed to the NASD / Amex Stock Exchange on the following matters, as required in terms of the relevant NASD / Amex rules: • Composition of the committee and independence of committee members • Disclosures relating to non-independent members • Financial literacy and financial expertise of members, and • Review of the committee charter. 5.4 The committee shall report to shareholders as required by the relevant rules of the SEC. 6.

Meetings and reports:

6.1 The committee shall meet at least four times a year. 6.2 The committee will meet separately with the CEO and the CFO of the Company at such times as are appropriate to review the financial affairs of the Company. The audit committee will meet separately with the independent auditors and internal auditor of the Company, at such times as it deems appropriate (but not less than quarterly) to fulfill the responsibilities of the audit committee under this charter. 6.3 In addition to preparing the report in the Company’s proxy statement in accordance with the rules and regulations of the SEC, the committee will summarize its examinations and recommendations to the Board of Directors as may be appropriate, consistent with the committee’s charter. 7.

Delegation of authority: The committee may delegate to one or more designated members of the committee the authority to preapprove audit and permissible non-audit services, provided such pre-approval decision is presented to the full audit committee at its scheduled meetings.

8.

Definitions:

8.1 Independent member “Independent director” means a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgement in carrying out the responsibilities of a director. The following persons shall not be considered independent: (A) a director who is, or at any time during the past three years was, employed by the company; (B) a director who accepted or who has a Family Member who accepted any compensation from the company in excess of $100,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following: (i) compensation for board or board committee service; (ii) compensation paid to a Family Member who is an employee (other than an executive officer) of the company; or (iii) benefits under a tax-qualified retirement plan, or nondiscretionary compensation. (C) a director who is a Family Member of an individual who is, or at any time during the past three years was, employed by the company as an executive officer;

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(D) a director who is, or has a Family Member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following: (i) payments arising solely from investments in the company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs. (E) a director of the issuer who is, or has a Family Member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the issuer serve on the compensation committee of such other entity; or (F) a director who is, or has a Family Member who is, a current partner of the company’s outside auditor, or was a partner or employee of the company’s outside auditor who worked on the company’s audit at any time during any of the past three years. 8.2 Financial expert

For purposes of this item, an “audit committee financial expert” is an individual with the following attributes: (i) An understanding of Generally Accepted Accounting Principles (GAAP) and financial statements (ii) The ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves (iii) Experience in preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience in actively supervising one or more persons engaged in such activities (iv) An understanding of internal control over financial reporting, and (v) An understanding of audit committee functions.

The individual shall have acquired such attributes through: (i) Education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor, or experience in one or more positions that involve the performance of similar functions (ii) Experience in actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions (iii) Experience in overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements, or (iv) Other relevant experience.

1. 2 Audit committee attendance during fiscal 2008 Four audit committee meetings were held during the year on April 12, 2007; July 10, 2007; October 10, 2007; and January 10, 2008.

Deepak M. Satwalekar Prof. Marti G. Subrahmanyam Dr. Omkar Goswami Rama Bijapurkar Sridar A. Iyengar David L. Boyles

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No. of meetings Held Attended 4 4 4 4 4 3 4 2 4 4 4 4

During the year, the audit committee held four conference calls on April 6, 2007; July 5, 2007; October 5, 2007; and January 4, 2008.

1. 3 Audit committee report for the year ended March 31, 2008 Each member of the committee is an independent director, according to the definition laid down in the audit committee charter, and Clause 49 of the Listing Agreement with the relevant Indian stock exchanges. The Management is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s financial statements in accordance with the GAAS, and for issuing a report thereon. The committee’s responsibility is to monitor these processes. The committee is also responsible for overseeing the processes related to the financial reporting and information dissemination. This is to ensure that the financial statements are true, fair, sufficient and credible. In addition, the committee recommends to the Board the appointment of the Company’s internal and independent auditors. In this context, the committee discussed with the Company’s auditors, the overall scope and plans for the independent audit. The Management represented to the committee that the Company’s financial statements were prepared in accordance with GAAP. The committee discussed with the auditors, in the absence of the Management (whenever necessary), the Company’s audited financial statements including the auditors’ judgments about the quality, not just the applicability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. The committee also discussed with the auditors other matters required by the Statement on Auditing Standards No. 1 (SAS 61) – Communication with Audit Committees as amended and the Sarbanes-Oxley Act of 2002. Relying on the review and discussions conducted with the Management and the independent auditors, the audit committee believes that the Company’s financial statements are fairly presented in conformity with GAAP in all material aspects. The committee has also reviewed the internal controls put in place to ensure that the accounts of the Company are properly maintained and that the accounting transactions are in accordance with prevailing laws and regulations. In conducting such reviews, the committee found no material discrepancy or weakness in the internal control systems of the Company. The committee also reviewed the financial and risk management policies of the Company and expressed its satisfaction with the same. The Company’s auditors provided to the committee the written disclosures required by Independence Standards Board Standard No. 1 – ‘Independence Discussions with Audit Committees’, based on which the committee discussed the auditors’ independence with both the Management and the auditors. After review, the committee expressed its satisfaction with the independence of both the internal and the statutory auditors. Moreover, the committee considered whether any non-audit services provided by the auditors’ firm could impair the auditors’ independence, and concluded that there were no such services provided. The committee secured compliance on the affirmation of the Board of Directors to the NASDAQ stock exchange, under the relevant rules of the exchange on composition of the committee and independence of the committee members, disclosures relating to non-independent members, financial literacy and financial expertise of members, and a review of the audit charter. Based on the committee’s discussion with the Management and the auditors and the committee’s review of the representations of the Management and the report of the auditors to the committee, the committee has recommended the following to the Board of Directors:

1. The audited financial statements prepared as per Indian GAAP of Infosys Technologies Limited for the year ended March 31, 2008, be accepted by the Board as a true and fair statement of the financial status of the Company 2. The audited consolidated financial statements prepared as per Indian GAAP of Infosys Technologies Limited and its subsidiaries for the year ended March 31, 2008 be accepted by the Board as a true and fair statement of the financial status of the group, and 3. The financial statements prepared as per U.S. GAAP, and to be included in the Company’s Annual Report on Form 20-F, for the fiscal year ended March 31, 2008 be filed with the U.S. Securities and Exchange Commission. The committee has recommended to the Board the re-appointment of BSR & Co., Chartered Accountants, as the statutory auditors of the Company for the financial year ending March 31, 2009, and that the necessary resolutions for appointing them as auditors be placed before the shareholders. The committee has also recommended to the Board, the appointment of KPMG, India, as independent auditors of the Company for the U.S. GAAP financial statements, for the financial year ending March 31, 2009. The committee recommended the appointment of internal auditors to review various operations of the Company, and determined and approved the fees payable to them. The committee has also issued a letter in line with recommendation No. 9 of the Blue Ribbon Committee on audit committee effectiveness, which is to be provided in the financial statements prepared in accordance with the U.S. GAAP section of the Annual Report on Form 20-F. In conclusion, the committee is sufficiently satisfied that it has complied with its responsibilities as outlined in the audit committee charter.

Sd/-

Bangalore April 14, 2008

Deepak M. Satwalekar Chairperson, Audit committee

2. Compensation committee Our compensation committee comprises four independent directors. They are:

Prof. Marti G. Subrahmanyam, Chairperson



Deepak M. Satwalekar



Sridar A. Iyengar



Prof. Jeffrey S. Lehman

Responsibilities and authority The compensation committee shall annually review and approve for the CEO, the executive directors and senior management (a) the annual base salary, (b) the annual incentive bonus, including the specific goals and amount, (c) equity compensation, (d) employment agreements, severance arrangements, and change in control agreements / provisions, and (e) any other benefits, compensation or arrangements. The committee, in consultation with the CEO, shall review the performance of all the executive directors each quarter, on the basis of detailed performance parameters set for each of the executive directors at the beginning of the year. The compensation committee may, from time to time, also evaluate the usefulness of such performance parameters, and make necessary amendments. The committee is responsible for administering our stock option plans, including the review and grant of options to eligible employees under the plans. The committee may also make recommendations to the Board with respect to incentive compensation plans. The committee may form sub-committees and delegate authority to them when appropriate. The committee shall make regular reports to the Board. The committee shall review and reassess the adequacy of this charter annually and recommend any proposed changes to the Board for approval. The committee shall annually review its own performance. The committee shall have the sole authority to retain and terminate the services of any compensation consultant to be used to assist in the evaluation of compensation for the CEO, executive directors or senior management, and shall have the sole authority to approve the consultant’s fees and other retention terms. The compensation committee shall also have the authority to obtain advice and assistance from internal or external legal, accounting or other advisors.

Compensation committee attendance during fiscal 2008 Four compensation committee meetings were held during the year ended March 31, 2008. These were held on April 12, 2007; July 11, 2007; October 11, 2007; and January 11, 2008.

Prof. Marti G. Subrahmanyam Deepak M. Satwalekar Sridar A. Iyengar Prof. Jeffrey S. Lehman

Compensation committee charter Purpose The purpose of the compensation committee (“the committee”) of the Board of Directors (“the Board”) shall be to discharge the Board’s responsibilities relating to compensation of the Company’s executive directors and senior management. The committee has the overall responsibility of approving and evaluating the compensation plans, policies and programs for executive directors and senior management.

Membership and organization The compensation committee will be appointed by the Board and will serve at its discretion. The compensation committee shall consist of no fewer than three members. The members of the compensation committee shall meet the (i) independence requirements of the listing standards of the NASDAQ, (ii) non-employee director definition of Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended, and (iii) the outside director definition of Section 162(m) of the Internal Revenue Code of 1986, as amended. The members of the compensation committee will be appointed by the Board on the recommendation of the nominations committee.

No. of meetings Held Attended 4 4 4 4 4 4 4 4

During the year, the compensation committee held four conference calls on June 22, 2007; October 2, 2007; November 27, 2007; and February 20, 2008.

Compensation committee report for the year ended March 31, 2008 The committee reviewed the performance of all executive directors on a quarterly basis and approved the payment of individual performance incentive to each of them. The committee believes that the compensation and benefits are adequate to motivate and retain the senior officers of the Company. Save as disclosed, none of the directors had a material beneficial interest in any contract of significance to which the Company or any of its subsidiary undertakings was a party, during the financial year. Bangalore April 14, 2008

Sd/Prof. Marti G. Subrahmanyam Chairperson, Compensation committee

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3. Nominations committee

Other responsibilities

Our nominations committee comprises of five independent directors. They are:

• Reviewing and reassessing the adequacy of the committee’s charter as the need requires and recommending changes to the Board



Claude Smadja, Chairperson



Deepak M. Satwalekar

• Reviewing the Company’s corporate governance guidelines periodically and recommending amendments to the Board as necessary.



Dr. Omkar Goswami



David L. Boyles



Prof. Jeffrey S. Lehman

Nominations committee charter Purpose The purpose of the nominations committee (“the committee”) of the Board of Directors (“the Board”) of Infosys Technologies Limited (“the Company”) is to oversee the Company’s nomination process for the top level management and specifically to identify, screen and review individuals qualified to serve as executive directors, non-executive directors and independent directors consistent with criteria approved by the Board and to recommend, for approval by the Board, nominees for election at the annual meeting of shareholders.

Membership The members of the committee will be appointed by and shall serve at the discretion of the Board. The committee shall consist exclusively of independent directors of the Board, and the minimum number for such a committee shall be three. Unless the Board designates a chair, members of the committee may designate a chair by majority vote of the committee. A majority of the members of the committee will constitute a quorum for the transaction of the business of the committee, or two members of the committee, whichever is less.

Authority and responsibilities The committee has the authority to undertake the specific duties and responsibilities listed below and will have the authority to undertake such other specific duties as the Board prescribes from time to time.

Specific powers • The committee may conduct or authorize studies of matters within the committee’s scope of responsibility with full access to all books, records, facilities, and personnel of the Company • The committee may, at the expense of the Company, retain advisors to assist it in connection with its functions, as it deems necessary or appropriate. The Company shall provide for appropriate funding, as determined by the committee, for payment of any advisors employed by the committee pursuant to this charter. The Company shall pay the ordinary administrative expenses of the committee that are necessary or appropriate for the carrying out of its duties.

Meetings The committee shall meet at least twice a year, in conjunction with regular Board meetings. Additional meetings of the committee shall be held from time to time as determined by the needs of the Board or the committee. If the need arises, meetings may be held telephonically to address issues in between nomination committee meetings. In lieu of a meeting, upon decision from its chairman, the committee may also act by unanimous written consent.

Minutes The committee will maintain written minutes of its meetings, including formal telephonic meetings, which will be filed with the minutes of the meetings of the Board, and will also comprise the record of any action taken by written consent.

Reports The committee shall report to the full Board at the regularly scheduled Board meetings on issues which it may determine are necessary or appropriate in the discharge of its duties.

Specific responsibilities of the committee include:

Compensation

Nomination of directors

Members of the committee shall receive such fees, if any, for their services as committee members as may be determined by the Board.

Identifying, screening and reviewing candidates for executive director, non-executive director and independent director positions, consistent with qualifications and criteria approved by the Board (including evaluation of incumbent directors for potential re-nomination), and making recommendations to the Board on candidates for: (i) nomination for election or re-election by the stockholders; and (ii) any Board vacancies that are to be filled by the Board. The nominations committee may act on its own in identifying potential candidates, inside or outside the Company, or may act upon proposals submitted by the Chairman of the Board of Directors. The committee will review and discuss all documents pertaining to candidates and will conduct evaluation of candidates in accordance with a process that it sees fit and appropriate, passing on the recommendations for the nomination to the Board.

Consultative role

Nominations committee attendance during fiscal 2008 The committee held four meetings during the year on April 12, 2007; July 11, 2007; October 11, 2007; and January 11, 2008.

Claude Smadja Deepak M. Satwalekar Dr. Omkar Goswami David L. Boyles Prof. Jeffrey S. Lehman

No. of meetings Held Attended 4 3 4 4 4 3 4 4 4 4

Nominations committee report for the year ended March 31, 2008

The nominations committee plays a consultative role for any appointment requiring Board approval, as stipulated by law or regulation, for top management positions such as CFO, Company Secretary, Head of HR (if the candidate for the position is not slated to be an executive director). It provides its advice and recommendation to the Board.

The committee discussed the issue of the retirement of members of the Board as per statutory requirements. As a third of the members have to retire every year based on their date of appointment, Claude Smadja, Sridar A. Iyengar, Nandan M. Nilekani, K. Dinesh and Srinath Batni will retire in the ensuing Annual General Meeting. The committee considered their performance and recommended that the necessary resolutions for their re-election be considered by the shareholders.

Director evaluation



The committee co-ordinates and oversees the annual self-evaluation of the performance of the Board and of individual directors in the governance of the Company.

Bangalore April 7, 2008

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Sd/Claude Smadja Chairperson, Nominations committee

4. Investor grievance committee

Committee membership and organization

Our investor grievance committee comprises of four independent directors. They are:

The risk management committee shall be appointed by and will serve at the discretion of the Board. The risk management committee shall consist of no fewer than three members. The members of the risk management committee shall meet the (i) independence requirements of the listing standards of the NASDAQ, (ii) non-employee director definition of Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended, (iii) the outside director definition of Section 162(m) of the Internal Revenue Code of 1986, as amended, and any other requirements in India.



Rama Bijapurkar, Chairperson Dr. Omkar Goswami Claude Smadja Prof. Jeffrey S. Lehman

K. Parvatheesam, Company Secretary, is the Compliance Officer.

Investor grievance committee attendance during fiscal 2008 The committee has the mandate to review and redress shareholder grievances. Four investor grievance committee meetings were held during the year on April 12, 2007; July 11, 2007; October 11, 2007; and January 11, 2008. No. of meetings Held 4 4 4 4

Rama Bijapurkar Dr. Omkar Goswami Claude Smadja Prof. Jeffrey S. Lehman

Attended 2 3 3 4

Investor grievance committee report for the year ended March 31, 2008 The committee expresses satisfaction with the Company’s performance in dealing with investor grievances and its share transfer system. Details of complaints resolved during the financial year 2007-08 are as follows: Nature of complaints

Dividend related

Received during the year 838

Resolved during the year 838

Closing

–

It has also noted the shareholding in dematerialized mode as on March 31, 2008 as being 99.66%, as against 99.62% in the previous year.

Sd/-

Bangalore April 7, 2008

Rama Bijapurkar Chairperson, Investor grievance committee

The members of the risk management committee will be appointed by the Board on the recommendation of the nominations committee.

Meetings and quorum The committee shall meet at least four times a year. Two members, being independent directors present, shall form the quorum for the meeting of the committee.

Committee responsibilities and authority The risk management committee shall annually review and approve the Risk Management Policy and associated frameworks, processes and practices of the Company. The risk management committee shall ensure that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities. The risk management committee shall evaluate significant risk exposures of the Company and assess Management’s actions to mitigate the exposures in a timely manner (including one-off initiatives, and ongoing activities such as business continuity planning and disaster recovery planning & testing). The risk management committee will co-ordinate its activities with the audit committee in instances where there is any overlap with audit activities (e.g. internal or external audit issue relating to risk management policy or practice). The risk management committee may form and delegate authority to sub-committees when appropriate. The risk management committee shall make regular reports to the Board. The risk management committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.

5. Risk management committee

The Board shall review the performance of the risk management committee annually.

Our risk management committee comprises of four independent directors. They are:

The risk management committee shall have access to any internal information necessary to fulfill its oversight role. The risk management committee shall also have authority to obtain advice and assistance from internal or external legal, accounting or other advisors.



David L. Boyles, Chairperson Prof. Marti G. Subrahmanyam Claude Smadja Sridar A. Iyengar

Risk management committee charter Purpose The purpose of the risk management committee of the Board of Directors (“the Board”) of Infosys Technologies Limited (“the Company”) shall be to assist the Board in fulfilling its corporate governance in overseeing the responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environment risks. The committee has overall responsibility for monitoring and approving the risk policies and associated practices of the Company. The risk management committee is also responsible for reviewing and approving risk disclosure statements in any public documents or disclosures.

Risk management committee attendance during fiscal 2008 The committee held five meetings during the year on April 13, 2007; June 22, 2007; July 10, 2007; October 10, 2007; and January 10, 2008.

David L. Boyles Prof. Marti G. Subrahmanyam Claude Smadja Sridar A. Iyengar

No. of meetings Held Attended 5 5 5 5 5 4 5 5

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Risk management committee report for the year ended March 31, 2008 The committee reviewed the Company’s risk management activities on a quarterly basis. These included review of findings of the Risk Survey for identification of risks, account and project-level risk assessment methodologies, approach & plan for the Infosys Risk Dashboard and measures instituted to mitigate risks from time to time. The committee believes that the Infosys Risk Framework along with risk assessment and reporting methodologies are adequate to cover material risks facing the Company, and will strengthen the risk management practices across the Company. In conclusion, the committee is sufficiently satisfied that it has complied with its responsibilities as outlined in the risk management committee charter.

and annual financial statements, along with segmental information, are posted on our website (www.infosys.com). Earnings calls with analysts and investors are broadcast live on the website, and their transcripts are published on the website soon thereafter. Any specific presentations made to analysts and others are also posted on our website. The proceedings of the Annual General Meeting are webcast live for shareholders across the world. The video archives are also available on our website for reference.

Investor grievances and share transfer

Formal evaluation of officers

We have a Board-level investor grievance committee to examine and redress shareholders’ and investors’ complaints. The status on complaints and share transfers is reported to the full Board. The details of shares transferred and the nature of complaints are provided elsewhere in the Annual Report. For shares transferred in physical form, the Company gives adequate notice to the seller before registering the transfer of shares. The share transfer committee of the Company will meet as often as required to approve share transfers. For matters regarding shares transferred in physical form, share certificates, dividends, change of address, etc., shareholders should communicate with Karvy Computershare Private Limited, our registrar and share transfer agent. Their address is given in the Shareholder information section.

The compensation committee of the Board approves the compensation and benefits for all executive Board members as well as members of the executive council. Another committee, headed by the CEO, reviews, evaluates and decides the annual compensation of our officers from the level of vice president, excluding members of the Executive Council. The compensation committee of the Board administers the 1998 and the 1999 Stock Option Plans.

Share transactions in electronic form can be effected in a much simpler and faster manner. After confirmation of sale / purchase transaction from the broker, shareholders should approach the depositary participant with a request to debit or credit the account for the transaction. The depositary participant will immediately arrange to complete the transaction by updating the account. There is no need for separate communication to the Company to register the share transfer.

Board interaction with clients, employees, institutional investors, the government and the press

Details of non-compliance



Sd/-

Bangalore April 6, 2008

David L. Boyles Chairperson, Risk management committee

D. Management review and responsibility

The Chairman, the Co-Chairman, the CEO and the COO, in consultation with the CFO, handle all interactions with investors, media, and various governments. The CEO and the COO manage all interactions with clients and employees.

Risk management We have an integrated approach to managing risks inherent in various aspects of our business. A detailed Risk management report is provided elsewhere in the Annual Report.

Management’s discussion and analysis

There has been no non-compliance with any legal requirements nor have there been any strictures imposed by any stock exchange, SEBI or SEC, on any matters relating to the capital market over the last three years.

Postal ballots For the year ended March 31, 2008, there are no ordinary or special resolutions that need to be passed by our shareholders through a postal ballot.

Auditors’ certificate on corporate governance

This is included as a separate section in this Annual Report.

As required by Clause 49 of the Listing Agreement, the auditors’ certificate is given as an annexure to the Directors’ report.

E. Shareholders

CEO and CFO certification

Disclosures regarding appointment or re-appointment of directors

As required by Clause 49 of the Listing Agreement, the CEO / CFO certification is provided elsewhere in the Annual Report.

According to the Articles of Association, one-third of the directors retire by rotation and, if eligible, seek re-appointment at the Annual General Meeting of shareholders. As per Article 122 of the Articles of Association, Claude Smadja, Sridar Iyengar, Nandan M. Nilekani, K. Dinesh and Srinath Batni will retire in the ensuing Annual General Meeting. The Board has recommended the re-appointment of all the retiring directors. The detailed profiles of all these directors are provided in the Notice to the Annual General Meeting.

Communication to shareholders Since June 1997, we have been sending to each shareholder, quarterly reports, which contain selective financial data extracted from the audited financial statements under Indian GAAP and unaudited financial statements under U.S. GAAP, along with additional information. Moreover, the quarterly / annual results and official news releases are generally published in The Economic Times, The Times of India, Business Standard, Business Line, Financial Express and the Udayavani (a regional daily published from Bangalore). Quarterly

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Code of Conduct In compliance with Clause 49 of the Listing Agreement, the Company has adopted a Code of Ethics for Principal Executives and Senior Financial Officers. This Code is applicable to all the members of the Board, the Executive Council and senior financial officers. This Code is in addition to the Company’s Code of Business Conduct, applicable to all the employees of the Company. A copy of the said Code of Ethics for Principal Executives and Senior Financial Officers and the Code of Business Conduct is available at our website, www.infosys.com. All the members of the Board and the Executive Council and senior financial officers have affirmed compliance to the Code of Ethics for Principal Executives and Senior Financial Officers and the Code of Business Conduct, as on March 31, 2008. A declaration to this effect signed by the CEO and Managing Director and the CFO is provided elsewhere in the Annual Report.

General body meetings Details of the last three Annual General Meetings are given below:

Date, time and venue of the last three AGMs Financial year ended March 31, 2005

Date & Time June 11, 2005 at 3 p.m. IST

March 31, 2006

June 10, 2006 at 3 p.m. IST November 7, 2006* at 9 a.m. IST June 22, 2007 at 3 p.m. IST

March 31, 2007

*

Venue NIMHANS Convention Centre, Hosur Road, Bangalore, India

Special resolution passed • Approval for keeping register of members, index of members, returns and copies of certificates and documents in the office of Karvy Computershare Private Limited, our registrar and share transfer agents • Alteration in the capital clause of Articles of Association to increase authorized capital • Approval for sponsoring a secondary ADS offering • Payment of remuneration in the form of commission to directors who are neither in the whole-time employment of the Company nor a managing director

Extraordinary General Meeting

Compliance with non-mandatory requirements of Clause 49 of the Listing Agreement Clause 49 of the Listing Agreement mandates us to obtain a certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in the Clause, and annex the certificate with the Directors’ report, which is sent annually to all our shareholders. We have obtained a certificate to this effect and the same is given as an annexure to the Directors’ report. The Clause further states that the non-mandatory requirements may be implemented as per our discretion. However, the disclosures of compliance with mandatory requirements and adoption (and compliance) / non-adoption of the non-mandatory requirements shall be made in the Corporate governance report in the Annual Report. We comply with the following non-mandatory requirements:

The Board Independent Directors may have a tenure not exceeding, in the aggregate, a period of nine years, on our Board. None of the independent directors on our Board have served for a tenure exceeding nine years from the date when the new Clause 49 became effective.

Remuneration committee We have instituted a compensation committee. A detailed note on compensation / remuneration committee is provided elsewhere in the Annual Report.

Shareholders’ rights The Clause states that a half-yearly declaration of financial performance including summary of the significant events in the last six months, may be sent to each shareholder. We communicate with investors regularly through e-mail, telephone and face-to-face meetings either in investor conferences, company visits or on road shows. We also leverage the internet in communicating with our investor base. We announce quarterly financial results within two weeks of the close of a quarter. After the announcement of the quarterly financial results, a business television channel in India telecasts a live discussion with our Management. This enables a large number of retail shareholders in India to understand our operations better. The announcement of quarterly results is followed by press conferences and earnings conference calls. The earnings calls are webcast live on the Internet so that information is available to all at the same time. Further, transcripts of the earnings calls are posted on our website www.infosys.com within 72 hours. Also, we send an extract of the

quarterly reports to each household of shareholders. Highlights of the results are also made available to mobile phone users in India through SMS and WAP. We have also voluntarily furnished eXtensible Business Reporting Language (XBRL) data to the SEC. We are participating in SEC’s voluntary program for reporting financial information on EDGAR using XBRL and are one of the few companies in the world to adopt this standard.

Training of Board members All new non-executive directors inducted into the Board are given an orientation. Presentations are made by various executive directors giving an overview of our operations to familiarize the new non-executive directors with the operations. The new non-executive directors are given orientation on our services, group structure and subsidiaries, our constitution, Board procedures and matters reserved for the Board, our major risks and risk management strategy, etc. The Board’s policy is to have separate meetings regularly with independent directors to update them on all business-related issues and new initiatives. In such meetings, the executive directors and other members of the senior management make presentations on relevant issues. We also facilitate directors’ education. Each director is entitled for a training fee of US $5,000 per annum. Independent directors are allowed to attend educational programs in the areas of board / corporate governance.

Mechanism for evaluating non-executive Board members The Board evaluates the performance of non-executive / independent directors through a peer-evaluation process every year. Each external Board member has to present before the entire Board on how they have performed / added value to the Company. Every Board member evaluates each external Board member on a scale of 1 to 10 based on the performance indicators. Independent directors have three key roles, namely, governance, control and guidance. Some of the performance indicators based on which the independent directors are evaluated are: • Ability to contribute to and monitor our corporate governance practices • Ability to contribute by introducing international best practices to address top-management issues • Active participation in long-term strategic planning • Commitment to the fulfillment of a director’s obligations and fiduciary responsibilities. This includes participation and attendance.

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Whistle-blower policy We have established a mechanism for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of our code of conduct or ethics policy. It also provides for adequate safeguards against victimization of employees who avail of the mechanism, and also allows direct access to the Chairperson of the audit committee in exceptional cases. We further affirm that no employee has been denied access to the audit committee.

F. Compliance with the corporate governance codes Naresh Chandra Committee The Government of India, by an order dated August 21, 2002, constituted a high-level committee under the chairmanship of Naresh Chandra to examine the auditor-company relationship and to regulate the role of auditors. The trigger was instances of scams in the U.S. and certain instances in India involving auditors. In fact, the spontaneity with which the U.S. responded to the high-profile corporate scams by enacting the Sarbanes-Oxley Act in a very short time and taking strong measures to deter recurrences of such scams, prompted the Indian regulators and authorities to come out with almost similar recommendations. The Naresh Chandra Committee report contains five chapters. Chapters 2, 3 and 4 which deal with the auditor-company relationship, auditing the auditors’ and independent directors’ role, remuneration and training are relevant to us. Chapter 1 is an introductory section and Chapter 5 relates to regulatory changes. We comply with these recommendations.

Kumar Mangalam Birla Committee SEBI appointed the Committee on Corporate Governance on May 7, 1999, under the chairmanship of Kumar Mangalam Birla, member of the SEBI Board, to promote and raise the standards of corporate governance. The SEBI Board considered and adopted the recommendations of the committee in its meeting held on January 25, 2000. In accordance with the guidelines provided by SEBI, the market regulator, the stock exchanges had modified the listing requirements by incorporating in the listing agreement a new Clause 49, so that proper disclosure for corporate governance is made by companies in the following areas: Board of directors, Audit committee, Remuneration committee, Board procedure, Management discussion and analysis, Shareholder Information, and Corporate governance report in the annual report. We comply with these recommendations.

Revised Clause 49 of the listing agreement SEBI, with a view to improve corporate governance standards in India, constituted the Committee on Corporate Governance under the chairmanship of N. R. Narayana Murthy. This move of SEBI signifies the regulator’s anxiety to ensure that the governance practices are corrected and improved upon expeditiously. The terms of reference for the committee were to review the performance of corporate governance and to determine the role of companies in responding to rumors and other price-sensitive information circulating in the market, in order to enhance the transparency and integrity of the market. The committee came out with two sets of recommendations: the mandatory recommendations and the non-mandatory recommendations. The mandatory recommendations focus on strengthening the responsibilities of audit committees, improving the quality of financial disclosures, including those pertaining to related party transactions and proceeds from initial public offerings, requiring corporate executive boards to assess and disclose business risks in the annual reports of companies, calling upon the Board to adopt a formal code of conduct, the position of nominee directors, and improved disclosures relating to compensation to non-executive directors and shareholders’ approval of the same.

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The non-mandatory recommendations pertain to moving to a regime providing for unqualified corporate financial statements, training of Board members and evaluation of non-executive directors’ performance by a peer group comprising the entire Board of Directors, excluding the director being evaluated. SEBI has incorporated the recommendations made by the Narayana Murthy Committee on Corporate Governance in Clause 49. Clause 49 as revised was made effective from January 1, 2006. We fully comply with the revised Clause 49 of the Listing Agreement.

Euroshareholders Corporate Governance Guidelines 2000 “Euroshareholders” is the confederation of European shareholders associations, constituted with the overall task of representing the interests of individual shareholders in the European Union. In April 1999, the Organization for Economic Co-operation and Development (OECD) published its general principles on corporate governance. The Euroshareholders guidelines are based on the same principles, but are more specific and detailed. Subject to the statutory regulations in force in India, we comply with these recommendations.

Compliance with findings and recommendation of The Conference Board Commission on Public Trust and Private Enterprises in the U.S. The Conference Board Commission on Public Trust and Private Enterprises was convened to address the circumstances which led to corporate scandals and the subsequent decline of confidence in American capital markets. The Commission has suggested ways in which appropriate governance practices can work to rebuild confidence in the integrity, reliability, and transparency of these markets by addressing three key and much-debated areas – executive compensation, corporate governance, and audit and accounting issues – as they relate to publicly-held corporations. The Commission issued its first set of findings and recommendations – Part 1: Executive Compensation, on September 17, 2002. Part 2: Corporate Governance and Part 3: Audit and Accounting were released on January 9, 2003. We substantially comply with these recommendations.

OECD Principles of Corporate Governance The governments of the 30 countries in the Organization for Economic Co-operation and Development (OECD) have recently approved a revised version of the OECD’s Principles of Corporate Governance adding new recommendations for good practice in corporate behavior with a view to rebuilding and maintaining public trust in companies and stock markets. The revised Principles respond to a number of issues that have undermined the confidence of investors in company management in recent years. They call on governments to ensure genuinely effective regulatory frameworks and on companies themselves to be truly accountable. They advocate increased awareness among institutional investors and an effective role for shareholders in executive compensation. They also urge strengthened transparency and disclosure to counter conflicts of interest. We substantially comply with these principles of corporate governance. A detailed compliance report with the recommendations of various committees listed above is available on our website (www.infosys.com).

United Nations Global Compact Programme Announced by the United Nations Secretary-General, Kofi Annan, at the World Economic Forum in Davos, Switzerland, in January 1999, and formally launched at the UN Headquarters in July 2000, the Global Compact Programme calls on companies to embrace

nine principles in the areas of human rights, labor standards and environment. The Programme is a value-based platform designed to promote institutional learning. It utilizes the power of transparency and dialogue to identify and disseminate good practices based on universal principles. The nine principles are drawn from the Universal Declaration of Human Rights, the International Labor Organization’s Fundamental Principles on Rights at Work, and the Rio Principles on Environment and Development.

future skills improvements in the workforce. Children who do not complete their primary education are likely to remain illiterate and will not acquire the skills needed to get a job and contribute to the development of a modern economy.

According to these principles, businesses should:

• Eliminate discrimination with respect to employment and occupation: Discrimination in employment and occupation restricts the available pool of workers and skills, and isolates an employer from the wider community. Non-discriminatory practices ensure that the best-qualified person fills the job.

• Support and respect the protection of internationally proclaimed human rights: Corporate leadership in human rights is good for the community and for business. The benefits of responsible engagement for business include a greater chance of a stable and harmonious atmosphere in which to do business, and a better understanding of the opportunities and problems of the social context. Further, the benefits of corporate social responsibility for society include less adverse impacts from ill-thought-through business initiatives.

• Support a precautionary approach to environmental challenges: It is more cost-effective to take early actions to ensure that irreversible environmental damage does not occur. This requires developing a life-cycle approach to business activities to manage uncertainty and ensure transparency. Investing in production methods that are not sustainable, that deplete resources and that degrade the environment, has a lower long-term return than investing in sustainable operations.

• Ensure that they are not complicit in human rights abuses: An effective human rights policy will help companies avoid being implicated in human rights violations.

• Undertake initiatives to promote greater environmental responsibility: Given the increasingly central role of the private sector in global governance issues, the public is demanding that the business manage its operations in a manner that will enhance economic prosperity, ensure environmental protection and promote social justice.

• Uphold the freedom of association and the effective recognition of the right to collective bargaining: Freedom of association and the exercise of collective bargaining provide opportunities for constructive rather than confrontational dialogue, which harness energy to focus on solutions, that result in benefits to the enterprise, its stakeholders, and the society at large. • Support the elimination of all forms of forced and compulsory labor: Forced labor robs societies of the opportunities to apply and develop human resources for the labor markets of today, and develop skills through the education of children for the labor markets of tomorrow. • Support the effective abolition of child labor: Child labor results in scores of under-skilled, unqualified workers and jeopardizes

• Encourage the development and diffusion of environment friendly technologies: Limit production processes and technology that do not use resources efficiently, generate residues and discharge effluents. Implementing environmentally sound technologies helps a company reduce the use of raw materials leading to increased efficiency and increased competitiveness of the Company. On August 27, 2001, we adopted the UN Global Compact Programme and became a partner with the UN in this initiative. A strong sense of social responsibility is an integral part of our value system. We adhere to the principles of the UN Global Compact Programme.

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Shareholder information Corporate

dividend is transferred to IEPF, no claim shall lie in respect thereof.

Infosys was incorporated in Pune, in 1981, as Infosys Consultants Private Limited, a private limited company under the Indian Companies Act, 1956. We changed our name to Infosys Technologies Private Limited in April 1992 and to Infosys Technologies Limited in June 1992, when we became a public limited company. We made an initial public offering in February 1993 and were listed on stock exchanges in India in June 1993. Trading opened at Rs. 145 per share, compared to the IPO price of Rs. 95 per share. In October 1994, we made a private placement of 5,50,000 shares at Rs. 450 each to Foreign Institutional Investors (FIIs), Financial Institutions (FIs) and body corporate.

Tentative calendar

In March 1999, we issued 20,70,000 ADSs (equivalent to 10,35,000 equity shares of par value of Rs. 10/- each) at US $34 per ADS under the ADS Program and the same were listed on the NASDAQ National Market. All the above data is unadjusted for issue of stock split and bonus shares. In July 2003, June 2005 and November 2006, we successfully completed secondary ADR issues of US $294 million, US $1.1 billion and US $1.6 billion respectively.

Quarter ending Jun 30, 2008 Sep 30, 2008 Dec 31, 2008 Mar 31, 2009

Earnings release Quiet period Jul 11, 2008 Jun 16 to Jul 13, 2008 Oct 10, 2008 Sep 16 to Oct 12, 2008 Jan 13, 2009 Dec 16, 2008 to Jan 15, 2009 Apr 15, 2009 Mar 16 to Apr 17, 2009

Investor services Annual General Meeting Date and time Venue Book closure dates Dividend payment date

The address of our registered office is Electronics City, Hosur Road, Bangalore 560 100, Karnataka, India.

Investor awareness

Bonus issues and stock split Fiscal

Bonus

1986 1989 1991 1992 1994 1997 1999 2005 2007

1:1

1:1

1:1

1:1

1:1

1:1

1:1

3:1

1:1

In addition of shares, the company split the stock in the ratio of 2 for 1 in fiscal 2000

Dividend policy The current dividend policy is to distribute not more than 20% of the PAT (stand-alone Indian GAAP) as dividend. However, the Board of Directors has decided to increase the dividend payout ratio up to 30%, effective fiscal 2009.

Unclaimed dividend Section 205 of the Companies Act, 1956, mandates that companies transfer dividend that has been unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). In accordance with the following schedule, the dividend for the years mentioned below, if unclaimed within a period of seven years, will be transferred to IEPF. Year

Type of dividend

2001 Final 2002 Interim Final 2003 Interim Final 2004 Interim Final1 2005 Interim Final 2006 Interim Final2 2007 Interim Final 2008 Interim

Dividend per share (Rs.) 7.50 7.50 12.50 12.50 14.50 14.50 15.00 5.00 6.50 6.50 8.50 5.00 6.50 6.00

Date of Due date declaration for transfer Jun 2, 01 Oct 10, 01 Jun 8, 02 Oct 10, 02 Jun 14, 03 Oct 10, 03 Jun 12, 04 Oct 12, 04 Jun 11, 05 Oct 11, 05 Jun 10, 06 Oct 11, 06 Jun 22, 07 Oct 11, 07

Jul 1, 08 Nov 9, 08 Jul 7, 09 Nov 9, 09 Jul 13, 10 Nov 9, 10 Jul 11, 11 Nov 11, 11 Jul 10, 12 Nov 10, 12 Jul 9, 13 Nov 10, 13 Jul 21, 14 Nov 10, 14

Amount (Rs.)* 7,86,905 7,28,370 12,05,129 7,87,617 11,41,034 10,80,917 41,19,875 7,89,835 9,21,791 7,53,616 29,31,852 12,88,055 16,58,061 23,88,444

Amount unclaimed as on March 31, 2008. Includes one-time special dividend of Rs. 100/- per share Includes silver jubilee special dividend of Rs. 30/- per share

* 1 2

The Company will send a communication to the concerned shareholders, advising them to lodge their claims with respect to unclaimed dividend. Shareholders are cautioned that once unclaimed

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June 14, 2008, Saturday, 3 p.m. IST The NIMHANS Convention Centre, Hosur Road, Bangalore 560 029 May 31, 2008 to June 14, 2008 (both days inclusive) On or after June 14, 2008 (within the statutory time limit of 30 days), subject to shareholders’ approval

At Infosys, maintaining the highest standards of corporate governance is not a matter of mere form, but of substance. In continuation of our efforts in that direction, we have provided a synopsis of some of your rights and responsibilities as a shareholder on our website, www.infosys.com. We encourage you to visit our website and read the document. We hope that the document will give you appropriate guidance, though in brief, on any questions regarding your rights as a shareholder.

Dematerialization of shares and liquidity Infosys shares are tradable compulsorily in electronic form and, through Karvy Computershare Private Limited, Registrars and Share Transfer Agents, we have established connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The International Securities Identification Number (ISIN) allotted to our shares under the Depository System is INE009A01021. As on March 31, 2008, 99.66% of our shares were held in dematerialized form and the rest in physical form. We were the first company in India to pay a one-time custodial fee of Rs. 44.43 lakh to NSDL. Consequently, our shareholders do not have to pay depository participants the custodial fee charged by NSDL on their holding. Shares held in demat and physical mode as on March 31, 2008 Category Demat mode NSDL CDSL Total Physical mode Grand total

Number of shareholders 4,47,101 1,07,786 5,54,887 675 5,55,562

% to total equity shares

56,30,20,013 70,48,164 57,00,68,177 19,27,581 57,19,95,758

98.43 1.23 99.66 0.34 100.00

To enable us to serve our investors better, we request shareholders whose shares are in physical mode to dematerialize shares and to update their bank accounts with the respective depository participants.

Share transfers in physical form Shares sent for physical transfer are effected after giving a 15-day notice to the seller for confirmation of the sale. Our share transfer committee meets as often as required. The total number of shares transferred

in physical form during the year was 2,239 as against 5,557 for the previous year.

Investor complaints Nature of complaints Dividend related

Received Attended 2008 2007 2008 2007 838 859 838 859

We attended to most of the investors’ grievances / correspondences within a period of 10 days from the date of receipt of such grievances. The exceptions have been for cases constrained by disputes or legal impediments.

Designated e-mail address for investor services In terms of clause 47(f) of the Listing Agreement, the designated e-mail address for investor complaints is [email protected]

Legal proceedings There are certain pending cases related to disputes over title to shares in which we had been made a party. However, these cases are not material in nature.

Distribution of shareholding as on March 31, 2008 Range of equity No. of % No. of shares % shares held shareholders 1 12,982 2.34 12,982 – 2-10 2,15,354 38.76 14,96,016 0.26 11-50 2,15,567 38.80 58,67,102 1.03 51-100 51,204 9.22 40,42,094 0.71 101-200 24,321 4.38 37,15,920 0.65 201-500 14,426 2.60 47,58,046 0.83 501-1,000 8,779 1.58 65,90,966 1.15 1,001-5,000 8,680 1.56 2,05,71,939 3.60 5,001-10,000 2,001 0.36 1,41,24,165 2.47 10,001 and above 2,247 0.40 40,11,59,506 70.13 Total 5,55,561 100.00 46,23,38,736 80.83 Equity shares underlining ADS 1 – 10,96,57,022 19.17 Total 5,55,562 100.00 57,19,95,758 100.00

Shareholding patterns Category

Shareholders (No.)

March 31, 2008 Voting strength (%)

Number of shares held

Shareholders (No.)

March 31, 2007 Voting strength (%)

Number of shares held

19 19

16.52 16.52

9,44,95,978 9,44,95,978

19 19

16.54 16.54

9,44,83,178 9,44,83,178

184 71

2.92 4.20

1,67,18,693 2,40,36,054

227 60

3.35 2.92

1,90,64,788 1,66,68,286

563

33.36

19,08,21,914

646

32.55

18,59,15,580

4,066 5,42,914 7,696 48 5,55,542 1 5,55,562

2.86 17.52 2.95 0.50 64.31 19.17 100.00

1,63,48,351 10,01,92,778 1,68,69,562 28,55,406 36,78,42,758 10,96,57,022 57,19,95,758

4,337 4,76,788 6,739 52 4,88,849 1 4,88,869

2.35 19.48 3.20 0.50 64.35 19.11 100.00

1,34,34,982 11,12,79,541 1,83,34,246 28,72,604 36,75,70,027 10,91,56,657 57,12,09,862

Founders holding Indian founders Total founders holding (A) Public shareholding Institutional investors Mutual funds Banks, financial institutions and insurance companies Foreign institutional investors Others Private corporate bodies Indian public NRIs / OCBs / Foreign nationals Trusts Total public shareholding (B) Equity shares underlying ADS (C) Total (A + B + C)

Shareholders holding more than 1% of the shares

Listing on stock exchanges

Details of shareholders (non-founders) holding more than 1% of the equity as on March 31, 2008 are given below. Name of shareholder Life Insurance Corporation of India1 Copthall Mauritius Investment Limited2 Oppenheimer Funds Inc.2 Genesis Indian Investment Company Limited2 Fidelity Management and Research Company2 Abu Dhabi Investment Authority2 Government of Singapore2 Jamuna Raghavan3 (1) (2) (3)

Financial Institution Foreign Institutional Investor Non-resident Indian

No. of shares 2,12,68,265 1,21,47,112 1,15,69,204 88,98,419 70,00,000 62,80,481 61,80,307 59,57,832

% 3.72 2.12 2.02 1.56 1.22 1.10 1.08 1.04

Codes Exchange Reuters Bloomberg

India NSE INFOSYSTCH INFY.NS NINFO IN

BSE 500209 INFY.BO INFO IN

Global NASDAQ INFY INFY.O –

The listing fees for fiscal 2009 have been paid for all the above stock exchanges.

Stock market data relating to shares listed in India Our market capitalization is included in the computation of the BSE30 Sensitive Index (Sensex), the BSE Dollex, S&P CNX NIFTY Index and NASDAQ 100 Index. The following tables contain the monthly high and low quotations, as well as the volume of shares traded at The Bombay Stock Exchange, the National Stock Exchange of India and NASDAQ for the current year.

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Stock market data – Exchanges in India High (Rs.) April, 2007 May June July August September October November December January, 2008 February March Total Volume traded / average outstanding shares (%)

2,128.30 2,081.30 2,020.05 2,034.95 1,967.60 1,911.75 2,124.55 1,908.35 1,813.60 1,749.70 1,662.10 1,526.35 2,128.30* FY 2008 FY 2007 FY 2006

BSE Low (Rs.)

Volume (No.)

High (Rs.)

NSE Low (Rs.)

67,95,665 67,44,729 50,96,888 79,66,920 65,67,257 53,36,949 93,78,471 66,35,129 41,17,730 67,93,507 47,89,672 48,39,043 7,50,61,960 16 18 27

2,128.70 2,081.65 2,019.20 2,034.35 1,967.25 1,915.85 2,125.05 1,917.15 1,817.80 1,748.30 1,622.85 1,521.20 2,128.70*

1,922.95 1,906.15 1,916.30 1,916.80 1,761.35 1,763.05 1,837.05 1,531.60 1,600.35 1,380.90 1,482.35 1,314.60 1,314.60*

1,912.20 1,904.30 1,916.45 1,916.55 1,761.00 1,763.25 1,839.10 1,531.85 1,600.70 1,377.55 1,480.90 1,313.10 1,313.10*

3,17,86,270 3,31,51,065 2,80,19,499 3,96,98,257 3,26,15,332 2,90,05,949 4,00,25,385 4,07,69,922 2,46,43,778 3,70,38,257 2,32,38,653 2,87,03,972 38,86,96,339 84 79 101

Total volume (BSE & NSE) (No.) 3,85,81,935 3,98,95,794 3,31,16,387 4,76,65,177 3,91,82,589 3,43,42,898 4,94,03,856 4,74,05,051 2,87,61,508 4,38,31,764 2,80,28,325 3,35,43,015 46,37,58,299 100 97 128

(Rs.) 2,044.20 1,959.88 1,927.14 1,992.93 1,808.03 1,827.30 1,860.92 1,527.84 1,616.60 1,494.57 1,555.24 1,321.06 1,321.06*

Volume (No.) 4,82,70,953 4,58,77,245 4,65,78,388 5,89,27,073 5,08,44,959 3,78,55,197 6,76,44,043 6,80,68,676 4,34,81,479 8,41,11,904 6,12,75,465 6,44,01,490 67,73,36,872

Volume (No.)

Represents yearly high and yearly low of equity shares The number of shares outstanding is 46,23,38,736. American Depository Shares (ADSs) have been excluded for the purpose of this calculation. *

Stock market data – NASDAQ High ($) 55.84 53.90 53.31 54.47 51.27 49.50 55.29 50.62 46.64 44.43 43.50 38.21 55.84*

April, 2007 May June July August September October November December January, 2008 February March Total

(Rs.) 2,291.67 2,175.40 2,163.31 2,188.60 2,083.10 1,967.62 2,170.69 2,000.50 1,838.08 1,746.54 1,738.26 1,529.16 2,291.67*

Low ($) 49.81 48.56 47.49 49.60 44.50 45.97 47.40 38.66 41.02 38.02 38.92 33.01 33.01*

* Represents yearly high and yearly low of ADSs Note: 1 ADS = 1 equity share. U.S. Dollar has been converted into Indian Rupees at the monthly closing rates. The number of ADSs outstanding as on March 31, 2008 was 10,96,57,022. The percentage of volume traded to the total float was 618% as against 367% in the previous year.

Infosys share price versus the BSE Sensex

ADS premium compared to price quoted on BSE

April 2007 to March 2008

(Based on monthly high prices)

Base 100 = April 1, 2007

Outstanding ADSs Our American Depository Shares (ADSs) as evidenced by American Depository Receipts (ADRs) are traded in the U.S. on the NASDAQ Global Select Market under the ticker symbol “INFY”. Each equity share is represented by one ADS. The ADRs evidencing ADSs began trading on NASDAQ from March 11, 1999, when they were issued by the Depository Deutsche Bank Trust Company Americas (the Depository), pursuant to the Deposit Agreement. As of March 31, 2008, there were 71,221 record holders of ADRs evidencing 10,96,57,022 ADSs (1 ADS = 1 equity share).

124 |

Power of talent

Investor contacts For queries relating to financial statements V. Balakrishnan Chief Financial Officer Tel.: +91 80 2852 0440, Fax: +91 80 2852 0754 E-mail: [email protected]

Investor correspondence in India Shekar Narayanan Senior Manager − Investor Relations Tel.: +91 80 2852 0261 Extn.: 67744, Fax: +91 80 2852 0754 E-mail: [email protected]

Registrar and share transfer agents Karvy Computershare Private Limited Registrars and Share Transfer Agents Plot No. 17 to 24, Near Image Hospital Vittalrao Nagar, Madhapur Hyderabad 500 081, India Tel.: +91 40 2343 1595, Fax: +91 40 2342 0814 E-mail: [email protected]

Depository bank (ADS) United States Deutsche Bank Trust Company Americas Trust & Securities Services 60 Wall Street, 27th Floor MS# NYC60-2727 New York, NY 10005, USA Tel.: +1 212 250 1905, Fax: +1 212 797 0327

For queries relating to shares / dividend / compliance K. Parvatheesam Company Secretary and Compliance Officer Tel.: +91 80 2852 0261 Extn.: 67750, Fax: +91 80 2852 0754 E-mail: [email protected]

Investor correspondence in the United States Sandeep Mahindroo Senior Manager − Investor Relations Tel.: +1 510 739 3407, Fax: +1 510 742 3090 E-mail: [email protected]

Custodian in India (ADS) ICICI Bank Limited Securities Market Services Empire Complex, F7 / E7 First Floor Senapati Bapat Marg, Lower Parel Mumbai 400 013, India Tel.: +91 22 5667 2030 / 2026, Fax: +91 22 5667 2740 / 2779

India Deutsche Bank A. G. Trust & Securities Services Hazarimal Somani Marg Fort, Mumbai 400 001, India Tel.: +91 22 5658 4621 26, Fax: +91 22 2207 9614

Depository for equity shares in India National Securities Depository Limited Trade World, A Wing, 4th Floor Kamala Mills Compound Senapathi Bapat Marg, Lower Parel Mumbai 400 013 Tel.: +91 22 2499 4200, Fax: +91 22 2497 2993 / 2497 6351

Addresses of stock exchanges In India National Stock Exchange of India Limited Exchange Plaza, Bandra-Kurla Complex Bandra East Mumbai 400 051 Tel.: +91 22 2659 8236, Fax: +91 22 2659 8237 Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai 400 001 Tel.: +91 22 2272 1233, Fax: +91 22 2272 2061

Central Depository Services (India) Limited Phiroze Jeejeebhoy Towers, 17th Floor Dalal Street, Fort Mumbai 400 023 Tel.: +91 22 2272 3333, Fax: +91 22 2272 3199 / 2272 2072

Outside India The NASDAQ Stock Market 9600 Blackwell Road Rockville, MD 20850 Tel.: +1 301 978 8500, Fax: +1 301 978 8510

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Power of talent

Note: Historical stock price performance should not be considered indicative of potential future stock price performance

Base 100 = June 1993

Adjusted for bonus issues and stock spilt

Share price chart

Additional information Employee strength and revenue growth since 1996 Fiscal 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 5-year CAGR

Employees Growth % 1,172 1,705 2,605 3,766 5,389 9,831 10,738 15,876 25,634 36,750 52,715 72,241 91,187 42

30 45 53 45 43 82 9 48 61 43 43 37 26

US GAAP (US $ million) Revenues Growth % Net Growth % income** 27 47 7 72 40 49 9 27 * 60 68 73 13 * 121 77 119 30 203 68 61 102 414 103 132 115 545 32 164 25 754 38 195 18 1,063 41 270 39 1,592 50 419 55 2,152 35 555 32 3,090 44 850 53 4,176 35 1,155 36 41 43

Indian GAAP – consolidated (Rs. crore) Income Growth % PAT** Growth % 89 139 258 509 882 1,901 2,604 3,640 4,853 7,130 9,521 13,893 16,692 36

60 57 85 98 73 115 37 40 33 47 34 46 20

21 34 60 133 286 623 808 955 1,244 1,846 2,458 3,850 4,659 37

58 60 79 120 115 118 30 18 30 48 33 57 21

*

Excludes a one-time deferred stock compensation expense arising from a stock split amounting to US $13 million and US $2 million in fiscal 1999 and 1998, respectively. Before exceptional items and includes reversal of tax provisions amounting to Rs. 121 crore (US $30 million) and Rs. 125 crore (US $29 million) for the fiscal 2008 and 2007 respectively. **

Employee strength of the Infosys Group 2008 Functional classification Software professionals Support Gender Male Female Age profile 20-25 26-30 31-40 41-50 51-60 60 and above

2007

85,013 6,174 91,187

93.2% 6.8% 100.0%

68,156 4,085 72,241

94.3% 5.7% 100.0%

61,589 29,598 91,187

67.5% 32.5% 100.0%

49,922 22,319 72,241

69.1% 30.9% 100.0%

50,902 27,476 11,598 981 230 – 91,187

55.8% 30.1% 12.7% 1.1% 0.3% – 100.0%

43,099 19,642 8,600 744 148 8 72,241

59.7% 27.2% 11.9% 1.0% 0.2% 0.0% 100.0%

Software development centers of Infosys Group We have 52 global development centers of which 26 are in India – eight in Bangalore, four in Chennai and three in Pune, two each in Bhubaneswar, Chandigarh and Mangalore, and one each in New Delhi, Hyderabad, Jaipur, Mysore and Thiruvananthapuram. We have a global development center in Toronto, Canada. In addition, we have nine proximity development centers in the United States − Boston, Charlotte, Chicago, Fremont, Houston, New Jersey, Phoenix, Plano and Hartford; three in China and four in the United Kingdom; two in Australia; and one each in Czech Republic, Japan (Tokyo), Mauritius, Poland, Philippines, Thailand and Mexico. Infosys BPO Limited, Infosys Australia, Infosys China, Infosys Consulting and Infosys Mexico are our wholly-owned subsidiaries.

Australia, Switzerland, Canada and France and one each in Belgium, China, Czech Republic, Denmark, Finland, Hong Kong, Italy, Ireland, Japan, Norway, Spain, Sweden, The Netherlands, U.A.E., U.K. and the Philippines. Addresses of offices are provided in the Annual Report.

American Depository Shares (ADSs) About ADSs An ADS is a negotiable certificate evidencing ownership of an outstanding class of stock in a non-U.S. company. ADSs are created when ordinary shares are delivered to a custodian bank in the domestic market, which then instructs a depository bank in the United States to issue ADSs based on a predetermined ratio. ADSs are SEC-registered securities and may trade freely, just like any other security, either on an exchange or in the over-the-counter market.

Difference between an ADS and a GDR ADSs and GDRs (Global Depository Receipts) have the same functionality – they both evidence ownership of foreign securities deposited with a custodian bank. ADSs represent securities that are listed in the United States, while GDRs represent securities listed outside the United States, typically in London.

Voting rights of ADS holders In the event of a matter submitted to the holders of ordinary shares for a vote, the ADS holders on record as at a particular date will be allowed to instruct the depository bank to exercise the vote with respect to the equity shares representing the ADSs held by them.

Entitlement to cash dividends Whenever dividends are paid to ordinary shareholders, cash dividends to ADS holders are declared in local currency and paid in dollars (based on the prevailing exchange rate) by the depository bank, net of the depository’s fees and expenses.

Disclosure policy We have a written disclosure policy, which covers interaction with external constituents such as analysts, fund managers and the media.

Marketing offices of Infosys Group We have 47 marketing offices around the world of which 43 are located outside India – 16 in the United States, three in Germany, two each in

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509 202 – 36 23 133 12 – 39.7 26.1 54.2 63.5 2.59 0.47 – 10.86 33 541 574 – 169 72 417 – 473 574 9,527 9,673 67.18

33.3 33.3 96.9 96.9 – – – – – 0.04 0.04 – – – 0.02 – 0.06 0.04 7 NA –

1999

0.12 0.04 – – – 0.04 – –

1982

46,314 59,338 67.55

33 800 833 – 284 160 508 – 612 833

5.41 0.56 – 15.75

39.3 32.4 40.6 46.3

882 347 – 53 40 286 30 –

2000

89,643 26,926 67.69

33 1,357 1,390 – 631 463 578 – 798 1,390

11.78 1.25 – 26.26

40.2 32.8 56.1 62.6

1,901 765 – 113 73 623 66 –

2001

88,650 24,654 68.08

33 2,047 2,080 – 961 323 1,027 – 1,293 2,080

15.27 2.50 – 39.29

39.9 31.0 46.6 54.4

2,604 1,038 – 161 135 808 132 –

2002

77,010 26,847 68.32

33 2,828 2,861 – 1,273 219 1,639 – 2,018 2,861

18.09 3.38 – 53.98

35.1 26.4 38.8 46.9

3,623 1,272 – 189 201 958 179 –

2003

Note: The above figures are based on Indian GAAP (stand-alone) * Calculated on a per share basis, adjusted for bonus issues in previous years ** Excluding extraordinary activities / exceptional items. Fiscal 2007 and 2008 include a tax reversal of Rs. 125 crore and Rs. 121 crore, respectively *** Total public shareholding as defined under Clause 40A of the Listing Agreement (excludes shares held by founders and American Depository Receipt holders)

Financial performance Income Operating profit (PBIDTA) Interest Depreciation Provision for taxation Profit after tax** Dividend One-time / Special dividend Margins (%) Operating profit margin Net profit margin** Return on average net worth** Return on average capital employed Per share data (Rs.)* Basic EPS** Dividend One-time / Special dividend Book value Financial position Share capital Reserves and surplus Net worth Debt Gross block Capital expenditure Cash and cash equivalents Investment in liquid mutual funds Net current assets Total assets Shareholding related Number of shareholders Market capitalization – period end Public shareholding (%)*** Credit rating Standard & Poor’s Dun & Bradstreet Corporate governance rating CRISIL – (GVC) ICRA

Select historical data

BBB 5A1

BBB 5A1 Level 1 CGR 1

5A1 Level 1 CGR 1

Level 1 CGR 1

1,95,956 82,154 66.55

138 6,759 6,897 – 2,837 1,048 3,779 684 3,832 6,897

44.34 7.50 15.00 125.15

33.1 26.8 39.9 44.9

9,028 2,989 – 409 303 2,421 412 830

2006

1,58,725 61,073 70.20

135 5,107 5,242 – 2,183 794 1,683 1,168 2,384 5,242

34.63 5.75 – 96.87

33.9 27.1 43.8 51.4

6,860 2,325 – 268 325 1,859 310 –

2005

Level 1 CGR 1

BBB 5A1

4,88,869 1,15,307 64.35

286 10,876 11,162 – 3,889 1,443 5,610 – 7,137 11,162

67.82 11.50 – 195.41

32.1 28.7 41.9 45.7

13,149 4,225 – 469 352 3,777 649 –

2007

Level 1 CGR 1

BBB+ 5A1

5,55,562 82,362 64.31

286 13,204 13,490 – 4,508 1,370 7,689 – 8,496 13,490

78.24 13.25 20.00 235.84

31.7 28.6 36.3 41.4

15,648 4,963 – 546 630 4,470 758 1,144

2008

in Rs. crore, except per share data, other information and ratios

66,945 32,909 65.56

33 3,220 3,253 – 1,570 430 1,839 930 1,220 3,253

23.43 3.69 12.50 61.03

33.3 26.1 40.7 48.1

4,761 1,584 – 231 227 1,243 196 668

2004

Select historical data in Rs. crore, except per share data

**

Excluding extraordinary activities / exceptional items. Fiscal 2007 and 2008 includes a tax reversal of Rs. 125 and Rs. 121 crore respectively. Infosys Annual Report 2007-08

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Revenue segmentation Geographic segmentation

Service offering in %

North America Europe India Rest of the world Total

2008 62.0 28.1 1.3 8.6 100.0

2007 63.3 26.4 1.6 8.7 100.0

2006 64.8 24.5 1.7 9.0 100.0

2005 65.2 22.3 1.9 10.6 100.0

2004 71.2 19.2 1.4 8.2 100.0

2008 14.7

2007 13.5

2006 13.9

2005 14.4

2004 14.8

35.7

37.4

36.0

34.6

36.6

28.5 7.2 21.6 11.8 5.2 2.5 8.5 100.0

30.2 7.2 19.3 10.0 5.3 2.4 12.1 100.0

28.5 7.5 16.5 10.1 4.7 5.1 13.7 100.0

25.2 9.4 18.5 9.8 3.2 7.6 11.9 100.0

23.7 12.9 16.6 11.6 3.0 7.1 10.3 100.0

2008 31.0 69.0 100.0

2007 26.7 73.3 100.0

2006 28.1 71.9 100.0

2005 30.0 70.0 100.0

2004 33.8 66.2 100.0

Industry segmentation in %

Manufacturing Banking, financial services and insurance Banking and financial services Insurance Telecom Retail Energy and utilities Transportation Others Total

Project type in %

Fixed price Time and material Total

Note: Figures based on Indian GAAP consolidated financials

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Power of talent

in %

Services Application development and maintenance Application development Application maintenance Business process management Consulting services and package implementation Infrastructure management Product engineering services Systems integration Testing services Others Total services Products Total

2008

2007

2006

2005

2004

45.4

48.0

51.5

56.3

59.7

21.7

23.1

24.9

29.4

31.7

23.7

24.9

26.6

26.9

28.0

5.7

4.7

4.0

2.7

1.6

23.8

21.1

19.7

18.8

18.2

4.9

4.4

3.6

3.0

2.1

1.6 2.8 7.5 4.7 96.4 3.6 100.0

1.6 2.3 6.9 7.1 96.1 3.9 100.0

1.8 1.7 5.9 8.0 96.2 3.8 100.0

2.0 1.6 5.8 6.8 97.0 3.0 100.0

2.2 1.0 5.3 7.1 97.2 2.8 100.0

Statutory obligations Software Technology Parks (STP) Scheme We have set up Software Technology Parks (STPs), which are 100% export-oriented units, for the development of software at Bangalore, Mangalore, Pune, Chennai, Bhubaneswar, Hyderabad, Chandigarh, Mysore, and Thiruvananthapuram (all in India). Certain capital items purchased for these centers are eligible for 100% customs and excise duty exemption, subject to fulfillment of stipulated export obligations, which was five times the value of duty-free imports of capital goods, or duty-free purchase of goods subject to excise, over a period of five years on a yearly basis. Beginning April 2001, the export obligation on duty-free import of capital goods, or duty-free purchase of goods subject to excise is thrice the value of such goods over a period of five years. Beginning April 2002, the export obligation on duty-free import of capital goods, or duty-free purchase of goods subject to excise is thrice the value of such goods over a period of three years. Beginning April 2003, the export obligation is restricted to net foreign exchange earnings for that particular financial year on duty-free import of capital goods, or duty-free purchase of goods subject to excise. All STP units started after March 2003 are subject to the new guidelines on calculation of export obligation as stated above. The export obligation on the wage bill was removed a few years ago. The non-fulfillment of export obligations may result in penalties as stipulated by the government, which may have an impact on future profitability. The table showing the export obligation, and the export obligation fulfilled by us, on a global basis, for all its STP units together, is given below: in Rs. crore

*

Fiscal

Export obligation

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

3 8 28 40 74 125 107 360 462 623 1,611* 396 439 749 743

Export obligation fulfilled 8 16 48 69 142 306 493 1,010 1,360 1,659 2,643 3,312 5,217 6,726 6,916

Excess / Cumulative (shortfall) excess / (shortfall) 5 5 8 13 20 33 29 62 68 130 181 311 386 697 650 1,347 898 2,245 1,036 3,281 1,032 4,313 2,916 7,229 4,778 12,007 5,977 17,984 6,173 24,157

The cumulative balance of export obligation was adjusted during the year

The total customs and excise duty exempted on both computer software and hardware imported and indigenously procured by us since 1993, amounts to Rs. 614 crore. We have fulfilled our export obligations on a global basis for all our operations under the Software Technology Park Scheme. However, in

case of STPs operationalized during the year, the export obligation will be met in the future. The export obligation in fiscal 2004 was higher on account of setting off cumulative export obligations for and including 2004 in the same year.

Special Economic Zones scheme Our first Special Economic Zone (“SEZ”) unit, became operational at Mahindra World City (a private multi-product Special Economic Zone), Chennai, in the financial year 2005-06, with an approved area of about 75.06 acres. We established our second SEZ unit at Chandigarh (Rajiv Gandhi Chandigarh Technology Park), with an approved area of about 30.22 acres, in the financial year 2006-07. During the financial year 2007-08, SEZs at Pune and Mangalore with an approved area of about 77.82 acres and 309 acres respectively have commenced production. The SEZ Unit came into existence under the new Special Economic Zones Act, 2005 (‘the SEZ Act’). As per the SEZ Act, the unit will be eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits or gains for a further five years. Certain tax benefits are also available for a further five years, subject to the unit meeting defined conditions. Other fiscal benefits including indirect tax waivers are being extended for setting up, operating and maintaining the unit.

Taxation We benefit from certain significant tax incentives provided to the software industry under Indian tax laws. These currently include: (i) deduction of export profit from the operation of software development facilities designated as Software Technology Parks (the STP tax deduction) and (ii) deduction of export profits from units in Special Economic Zones. The period for which STP tax deduction is available to each STP is restricted to 10 consecutive years, starting from the financial year when the unit started producing computer software or March 31, 2009, whichever is earlier. On April 29, 2008, the Finance Minister of India announced the Government of India’s proposal to extend the availability of the 10-year tax holiday by a period of one more year, such that the tax holiday will be available until the earlier of fiscal year 2010 or 10 years after the commencement of production by the undertaking, although such an extension is not yet effective. The details of the operationalization of various software development centers and the year to which the exemption under the Software Technology Park Scheme and for Special Economic Zones is valid, are presented elsewhere in this Annual Report. The benefits of these tax incentive programs have historically resulted in an effective tax rate, well below the statutory rates, for us. There is no assurance that the Government of India will continue to provide these incentives. The government may reduce or eliminate the tax exemptions provided to Indian exporters at any time in the future. This may result in our export profits being fully taxed, and may adversely affect the post-our tax profits in the future. On a full tax-paid basis, without any duty concessions on equipment, hardware and software, our post-tax profits for the relevant years are estimated as below: in Rs. crore, except per share data

Profit before tax and exceptional items Less: Additional depreciation on duty waived for certain assets Reduction in other income Adjusted profit before tax Less: Income tax on the above on full tax basis Restated profit after tax Restated basic EPS (Rs.)

2008 5,344 84 58 5,202 1,838 3,364 58.87

2007 4,247 76 38 4,133 1,451 2,682 48.17

2006 2,792 83 21 2,688 981 1,707 31.27

Note: The figures above are based on consolidated Indian GAAP financial statements. However, it may be noted that this is only an academic exercise. We have provided for income tax in full in the respective years and there is no carried-forward liability on this account.

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Human resources valuation The dichotomy in accounting between human and non-human capital is fundamental. The latter is recognized as an asset and is, therefore, recorded in the books and reported in the financial statements, whereas the former is ignored by accountants. The definition of wealth as a source of income inevitably leads to the recognition of human capital as one of the several forms of wealth such as money, securities and physical capital. We have used the Lev & Schwartz model to compute the value of human resources. The evaluation is based on the present value of future earnings of employees and on the following assumptions: a) employee compensation includes all direct and indirect benefits earned both in India and abroad, b) the incremental earnings based on group / age have been considered, and c) the future earnings have been discounted at the cost of capital of 13.32% (previous year – 14.97%). in Rs. crore, unless stated otherwise

Employees (No.) Software professionals Support Total Value of human resources Software professionals Support Total Total income Total employee cost Value-added Net profits excluding exceptional items Ratios Value of human resources per employee Total income / human resources value (ratio) Employee cost / human resources value (%) Value-added / human resources value (ratio) Return on human resources value (%)

2008

2007

85,013 6,174 91,187

68,156 4,085 72,241

92,331 6,490 98,821 16,692 8,878 14,820 4,659

53,592 3,860 57,452 13,893 7,112 11,879 3,861

1.08 0.17 9.0 0.15 4.7

0.80 0.24 12.4 0.21 6.7

Value-added in Rs. crore

2008 Value-added Income Less: Operating expenses excluding personnel costs Software development and business process management expenses Selling and marketing expenses General and administration expenses Value-added from operations Non-operating income Total value-added Distribution of value-added Human resources Salaries and bonus Providers of capital Dividend Minority interest Interest on debt Taxes Corporate income taxes Dividend tax Income retained in business Depreciation Retained in business Total

%

2007

16,692

13,893

1,306 302 968 2,576 14,116 704 14,820

1,187 371 834 2,392 11,501 378 11,879

8,878

59.9

7,112

59.9

1,902 – – 1,902

12.8 – – 12.8

649 11 – 660

5.5 0.1 – 5.6

685 323 1,008

4.6 2.2 6.8

386 102 488

3.2 0.9 4.1

598 2,434 3,032 14,820

4.0 16.5 20.5 100.0

514 3,105 3,619 11,879

4.3 26.1 30.4 100.0

Note: 1) The figures above are based on the consolidated Indian GAAP financial statements. 2) Dividends for fiscal 2008 include special dividend of Rs. 1,144 crore. 3) Income taxes for fiscal 2008 and 2007 include tax reversals of Rs. 121 crore and Rs. 125 crore respectively.

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%

Brand valuation The strength of the invisible From time to time, we have used various models for evaluating assets of the balance sheet to bring certain advances in financial reporting to the notice of our shareholders. The aim of such modeling is to lead the debate on the balance sheet of the next millennium. These models are still the subject of debate among researchers and using such models and data in projecting the future is risky. We are not responsible for any direct, indirect or consequential losses suffered by any person using these models or data. A balance sheet discloses the financial position of a company. The financial position of an enterprise is influenced by the economic resources it controls, its financial structure, liquidity and solvency, and its capacity to adapt to changes in the environment. However, it is becoming increasingly clear that intangible assets have a significant role in defining the growth of a high-tech company.

Valuing the brand The wave of brand acquisitions in the late 1980s exposed the hidden value in highly branded companies, and brought brand valuation to the fore. The values associated with a product or service are communicated to the consumer through the brand. Consumers no longer want just a product or service, they want a relationship based on trust and familiarity. A brand is much more than a trademark or a logo. It is a ‘trustmark’ – a promise of quality and authenticity that clients can rely on. Brand equity is the value addition provided to a product or a company by its brand name. It is the financial premium that a buyer is willing to pay for the brand over a generic or less worthy brand. Brand equity is not created overnight. It is the result of relentless pursuit of quality in manufacturing, selling, service, advertising and marketing. It is integral to the quality of client experiences in dealing with the company and its services over a period.

The second annual BRANDZ™ Top 100 Most Powerful Brands ranking published in co-operation with the Financial Times was announced in April 2008 by Millward Brown. According to the report, Google topped the ranking with a brand value of $86 billion. The market capitalization of Google at that time was $131 billion. Thus, 66% of market capitalization represented its brand value. (Source: NASDAQ website)

Methodology The task of measuring brand value is a complex one. Several models are available for accomplishing this. The most widely used is the brand-earnings-multiple model. There are several variants of this model. We have adapted the generic brand-earnings-multiple model (given in the article ‘Valuation of Trademarks and Brand Names’ by Michael Birkin in the book Brand Valuation, edited by John Murphy and published by Business Books Limited, London) to value our corporate brand, “Infosys”. The methodology followed for valuing the brand is given below: • Determine brand profits by eliminating the non-brand profits from the total profits • Restate the historical profits at present-day values • Provide for the remuneration of capital to be used for purposes other than promotion of the brand • Adjust for taxes • Determine the brand-strength or brand-earnings multiple Brand-strength multiple is a function of a multitude of factors such as leadership, stability, market, internationality, trend, support and protection. We have internally evaluated these factors on a scale of 1 to 100, based on the information available within.

Brand valuation in Rs. crore

2008 2007 2006 Profit before interest and tax 4,640 3,877 2,654 Less: Non-brand income 634 335 125 Adjusted profit before tax 4,006 3,542 2,529 Inflation factor 1.000 1.075 1.156 Present value of brand profits 4,006 3,808 2,924 Weightage factor 3 2 1 Weighted average profits 3,760 Remuneration of capital 626 Brand-related profits 3,134 Tax 1,065 Brand earnings 2,069 Brand multiple 15.4 Brand value 31.863 Assumptions: • The figures above are based on consolidated Indian GAAP financial statements • Brand revenue is total revenue excluding other income after adjusting for cost of earning such income, since this is an exercise to determine our brand value as a company and not for any of our products or services • Inflation is assumed at 7% per annum, 5% of the average capital employed is used for purposes other than promotion of the brand, and tax rate is at 33.99% • The earnings multiple is based on our ranking against the industry average based on certain parameters (exercise undertaken internally and based on available information) in Rs. crore

Brand value Market capitalization Brand value as a percentage of market capitalization Brand value / revenue (x)

2008 31.863 82,362 38.7% 1.91

2007 31,617 1,15,307 27.4% 2.28 Infosys Annual Report 2007-08

2006 22,915 82,154 27.9% 2.41

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Economic Value-Added (EVA®) Economic value-added measures the profitability of a company after taking into account the cost of capital. It is the post-tax return on capital employed (adjusted for the tax shield on debt) less the cost of capital employed. Companies which earn higher returns than cost of capital create value, and companies which earn lower returns than cost of capital are deemed destroyers of shareholder value. in Rs. crore, except as otherwise stated

2008

2007

2006

2005

Cost of capital Return on risk free investment (%) 8.00 8.00 7.50 6.80 Market premium (%) 7.00 7.00 7.00 7.00 Beta variant 0.76 0.99 0.78 0.98 Cost of equity (%) 13.32 14.97 12.96 13.63 Average debt / total capital (%) – – – – Cost of debt – net of tax (%) NA NA NA NA Weighted Average Cost of Capital (WACC) (%) 13.32 14.97 12.96 13.63 Average capital employed 12,527 9,147 6,177 4,331 Economic Value-Added (EVA®) Operating profits 4,640 3,877 2,654 2,048 Less: Tax 685 386 313 326 Cost of capital 1,669 1,369 801 590 Economic Value-Added 2,286 2,122 1,540 1,132 Enterprise value Market value of equity 82,362 1,15,307 82,154 61,073 Add: Debt – – – – Less: Cash and cash equivalents 8,307 6,033 4,709 2,998 Enterprise value 74,055 1,09,274 77,445 58,075 Return ratios PAT / average capital employed (%) 37.2 42.2 40.1 42.6 EVA® / average capital employed (%) 18.2 23.2 24.9 26.1 Enterprise value / average capital employed (x) 5.9 11.9 12.5 13.4 Growth (%) Operating profits 19.7 46.1 29.6 50.9 Average capital employed 37.0 48.1 42.6 38.6 7.7 37.8 36.0 64.3 EVA® Market value of equity (28.6) 40.4 34.5 85.6 Enterprise value (32.2) 41.1 33.4 93.4

2004

5.20 7.00 1.27 14.09 – NA

14.09 3,125

1,357 228 440 689

32,909 – 2,873 30,036

39.8 22.1

9.6 25.8 25.3 51.8 22.6 19.4

Note: Cost of equity = return on risk-free investment + expected risk premium on equity investment adjusted for our beta variant in India Figures above are based on consolidated Indian GAAP financial statements Cash and cash equivalents includes investments in liquid mutual funds

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Balance sheet including intangible assets As of March 31, in Rs. crore

SOURCES OF FUNDS Shareholders’ funds Share capital Reserves and surplus Capital reserves – Intangible assets Other reserves Minority interest APPLICATIONS OF FUNDS Fixed assets At cost Less: Accumulated depreciation Net block Add: Capital work-in-progress Intangible assets Brand value Human resources Investments Deferred tax assets Current assets, loans and advances Sundry debtors Cash and bank balances Loans and advances Less: Current liabilities and provisions Current liabilities Provisions Net current assets

2008

2007

286

286

1,30,684 13,509 1,44,193 – 1,44,479

89,069 10,969 1,00,038 4 1,00,328

5,439 1,986 3,453 1,324 4,777

4,642 1,836 2,806 965 3,771

31,863 98,821 1,30,684 72 119

31,617 57,452 89,069 25 92

3,297 6,950 2,771 13,018

2,436 5,834 1,251 9,521

1,912 2,279 8,827 1,44,479

1,469 681 7,371 1,00,328

Note: The figures above are based on consolidated Indian GAAP financial statements This balance sheet is provided for the purpose of information only. We accept no responsibility for any direct, indirect or consequential losses or damages suffered by any person relying on the same.

Intangible assets score sheet We caution investors that this data is provided only as additional information to them. We are not responsible for any direct, indirect or consequential losses suffered by any person using this data. From the 1840s to the early 1990s, a corporate’s value was mainly driven by its tangible assets – values presented in the corporate balance sheet. The managements of companies valued these resources and linked all their performance goals and matrices to these assets – Return on Investment, capital turnover ratio, etc. The market capitalization of companies also followed the value of tangible assets shown in the balance sheet with the difference seldom being above 25%. In the latter half of the 1990s, the relationship between market value and tangible asset value changed dramatically. By early 2000, the book value of the assets represented less than 15% of the total market value. In short, intangible assets are the key drivers of market value in this new economy. A knowledge-intensive company leverages know-how, innovation and reputation to achieve success in the marketplace. Hence, these attributes should be measured and improved upon year after year to ensure continual success. Managing a knowledge organization necessitates a focus on the critical issues of organizational adaption, survival, and competence in the face of ever-increasing, discontinuous environmental change. The profitability of a knowledge firm depends on its ability to leverage the learnability of its professionals, and to enhance the reusability of their knowledge and expertise. The intangible assets of a company include its brand, its ability to attract, develop and nurture a cadre of competent professionals, and its ability to attract and retain marqué clients.

Intangible assets The intangible assets of a company can be classified into four major categories: human resources, Intellectual Property assets, internal assets and external assets. Human resources

Human resources represent the collective expertise, innovation, leadership, entrepreneurship and managerial skills of the employees of an organization. Intellectual Property assets

Intellectual Property assets include know-how, copyrights, patents, products and tools that are owned by a corporation. These assets are valued based on their commercial potential. A corporation can derive its revenues from licensing these assets to outside users. Internal assets

Internal assets are systems, technologies, methodologies, processes and tools that are specific to an organization. These assets give the organization a unique advantage over its competitors in the marketplace. These assets are not licensed to outsiders. Examples of internal assets include methodologies for assessing risk, methodologies for managing projects, risk policies, and communication systems. External assets

External assets are market-related intangibles that enhance the fitness of an organization for succeeding in the marketplace. Examples are customer loyalty (reflected by the repeat business of the company) and brand value.

The score sheet We published models for valuing two of our most important intangible assets – human resources and the “Infosys” brand. This score sheet is broadly adopted from the intangible asset score sheet provided in the book titled The New Organizational Wealth, written by Dr. Karl-Erik Sveiby and published by Berrett-Koehler Publishers Inc., San Francisco. We believe such representation of intangible assets provides a tool to our investors for evaluating our market-worthiness.

Clients

The growth in revenue is 35% this year, compared to 44% in the previous year (in US $). Our most valuable intangible asset is our client base. Marqué clients or image-enhancing clients contributed 46% of revenues during the year. They gave stability to our revenues and also reduced our marketing costs. The high percentage (97%) of revenues from repeat orders during the current year is an indication of the satisfaction and loyalty of our clients. The largest client contributed 9.1% to our revenue, compared to 7.0% during the previous year. The top 5 and 10 clients contributed around 20.9% and 31.4% to our revenue respectively, compared to 19.4% and 31.4% respectively, during the previous year. Our strategy is to increase our client base and, thereby, reduce the risk of depending on a few large clients. During the year, we added 170 new clients compared to 160 in the previous year. We derived revenue from customers located in 58 countries against 54 countries in the previous year. Sales per client grew by around 26% from US $6.18 million in the previous year to US $7.76 million this year. Days Sales Outstanding (DSO) was 72 days this year compared to 64 in the previous year. Organization

During the current year, we invested around 3.00% of the value-added (2.67% of revenues) on technology infrastructure, and around 1.36% of the value-added (1.20% of revenues) on R&D activities. A young, fast-growing organization requires efficiency in the area of support services. The average age of support employees is 29.4 years, as against the previous year’s average age of 30.9 years. The sales per support staff, as well as the proportion of support staff to the total organizational staff, have improved over the previous year. People

We are in a people-oriented business. We added 33,177 employees this year on gross basis (net – 18,946) from 30,946 (net – 19,526) in the previous year. We added 8,523 laterals this year against 8,023 in the previous year. The education index of employees has gone up substantially to 2,51,970 from 2,03,270. This reflects the quality of our employees. Our employee strength comprises people from 70 nationalities. The average age of employees as of March 31, 2008 was 26, the same as in the previous year. Attrition was 13.4% for this year compared to 13.7% in the previous year (excluding subsidiaries). Attrition excluding involuntary separation was 12.1% for this year compared to 12.2% in the previous year. Notes

• Marqué or image-enhancing clients are those who enhance the company’s market-worthiness – typically, Global 1000 clients. They are often reference clients for us. • Sales per client is calculated by dividing total revenue by the total number of clients • Repeat business revenue is the revenue during the current year from those clients who contributed to our revenue during the previous year too • Value-added statement is the revenue less payment to all outside resources. The statement is provided elsewhere in this report. • Technology investment includes all investments in hardware and software, while total investment in the organization is the investment in our fixed assets • The average proportion of support staff is the average number of support staff to average total staff strength • Sales per support staff is our revenue divided by the average number of support staff (support staff excludes technical support staff) • The education index is shown as at the year end, with primary education calculated as 1, secondary education as 2, and tertiary education as 3.

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Growth / renewal

7.0 19.4 31.4 275 107 71 36 25 16 12 11 9 4 4 3 1 –

9.1 20.9 31.4 310 141 89 47 32 22 18 13 12 10 6 6 1 1

Stability 95.3 Average age of support staff (years) 1

6.18 27.79 6.69 64 0.19

Efficiency Sales per support staff US $ million Rs. crore General & admin expenses / revenue (%) Average proportion of support staff (%) 29.4

1.08 4.32 7.97 4.71

8.95 10.08

2.67 3.00

1.20 1.36

2008

Internal structure – our organization R&D 44 R&D / total revenue (%) 46 R&D / value-added (%) 98 Technology investment Investment / revenue (%) 500 Investment / value-added (%) 160 Total investment Total investment / total revenue (%) 114 Total investment / value-added (%) 26 44 54

2007

97.0 1

7.76 31.03 5.49 72 0.26

113 24 46 58

538 170

35 20 99

The above figures are based on Indian GAAP consolidated financial statement

Repeat business (%) No. of clients accounting > 5% of revenue Client concentration Top client (%) Top 5 clients (%) Top 10 clients (%) Client distribution 1 million dollar+ 5 million dollar+ 10 million dollar+ 20 million dollar+ 30 million dollar+ 40 million dollar+ 50 million dollar+ 60 million dollar+ 70 million dollar+ 80 million dollar+ 90 million dollar+ 100 million dollar+ 200 million dollar+ 300 million dollar+

Sales / Client US $ million Rs. crore Sales & marketing expenses / revenue (%) DSO (days) Provision for debts / revenues (%)

Revenue growth (%) In US Dollar terms In Rupee terms Exports / total revenue (%) Clients Total Added during the year Marqué clients Total Added during the year Revenue contribution (%) Revenue Derived – No. of countries

2008

External structure – our clients

Intangible assets score sheet

30.9 Average age of employees (years) Attrition % Excluding subsidiaries Excluding involuntary separation

Value-added / employee (Rs. crore) 0.92 Software professionals 4.14 Total employees 8.03 Value-added / employee ($ million) 5.18 Software professionals Total employees

26 13.7 12.2

13.4 12.1

0.04 0.04

0.05 0.05 26

0.19 0.18

69.1 30.9 2,028

30,946 19,526 8,023 2,03,270 65

72,241

2007

0.19 0.18

67.5 32.5 3,678

33,177 18,946 8,523 2,51,970 70

91,187

2008

Competence – our people Total employees 1.20 Added during the year 1.40 Gross Net 3.44 Laterals added 4.01 Staff education index Employees – No. of nationalities 10.87 Gender classification (%) 12.71 Male Female No. of non-Indian national employees

2007

Value ReportingTM At Infosys, we have always believed that information asymmetry between the Management and shareholders should be minimized. Accordingly, we have always been at the forefront in practicing progressive and transparent disclosure. We were the first in India to adopt US Generally Accepted Accounting Principles (GAAP). Thereafter, we rapidly progressed to additional disclosures that give deeper insights to the way we run our business and into our value creation. We continue to provide information that is not mandated by law because we believe it will enable investors to make more informed choices about our performance.

We identified the need to provide a range of non-financial parameters early in our existence – before our Indian public offering in 1993. The Value Reporting™ Disclosure Model

The Value Reporting Revolution: Moving Beyond the Earnings Game, authored by Robert Eccles, Robert Herz, Mary Keegan and David Phillips, associated to accounting firm PricewaterhouseCoopers, (published by John Wiley & Sons, Inc., USA, ©2001), acknowledged the need to go beyond GAAP in providing information to shareholders. In their book, Building Public Trust: The Future of Corporate Reporting (published by John Wiley & Sons, Inc., USA, ©2002 PricewaterhouseCoopers), our business model and reporting were referred to in detail. We believe the following Value ReportingTM paradigm applies to us. The Value Reporting™ paradigm

To reduce information asymmetry, we make the following disclosures in addition to the mandated Indian and US GAAP financial statements and supplementary data as required by the relevant statutes: • Brand valuation • Balance sheet including intangible assets • Economic Value-Added (EVA®) statement • Intangible asset scorecard • Risk management report • Human resource accounting and value-added statement These reports are integral to the Annual Report. By adopting similar internal measures to evaluate business performance, our employees are adjudged based on metrics that are additional to the financials. This balances financial and non-financial performance across all levels of the organization. Accordingly, we seek to align the measures by which stakeholders measure our performance with what results in employee rewards. In fiscal 2005, we adopted and furnished eXtensible Business Reporting Language (XBRL) data to the United States Securities and Exchange Commission (SEC) for the first time. We are the fourth company worldwide to adopt XBRL. We continue to participate in SEC’s voluntary program for reporting financial information on EDGAR using XBRL. In the coming years, we will continue in our commitment to furnish additional qualitative information to help our shareholders better understand the management of our business.

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Power of talent Associate Vice President Vice President

AVP VP

Chief Financial Officer Senior Vice President

CFO

Infosys Consulting, Inc.

Software Engineering and Technology Labs

IC

SETLabs

Chief Executive Officer Chief Operating Officer

SVP

COO

Horizontal Business Unit

Industry Business Unit

HBU

IBU

CEO

Management structure

Infosys Foundation “For benefits of globalization and technology to reach the poor, the private sector, philanthropic institutions and committed individuals should co-operate and establish partnerships with the government institutions. This would lift millions of our people out of poverty, provide them with opportunities and make them participate in the process and progress of globalization.” N. R. Narayana Murthy, Chairman and Chief Mentor, Infosys The Infosys Foundation continued its focus in the areas of education, healthcare, rural upliftment, and arts and culture this year. Highlights of some of the projects undertaken by the Foundation this year are:

• Donated ambulances to Sri Jayachamarajendra Indian Medical Institute and to a government hospital in Gandhi Nagar

Education

• Worked with SEARCH, an NGO, to reduce neonatal and infant mortality by developing a low-cost, home-based model of primary neonatal care

• Sponsored ‘Vijanana Sammelana’ at Shimoga, Karnataka, to impart knowledge of science to students and teachers

Arts and culture

• Donated computers and laptops to Gulbarga University, Athani University, Mangalore University and to the All India Vayu Sainik Camp in Bangalore • Launched OASIS, a training program for students in government schools • Worked with Sanmati Matimand Vikas Kendra in Maharashtra and the Association for the Mentally Challenged in Bangalore, toward the empowerment of the mentally challenged • Collaborated with Ichalkaranji Seva Bharathi, Mumbai Vidya Prasarak Mandal, Lucknow Yogakshema, Hyderabad Karnataka Sikshana Samithi, Kota Vidya Samste and Arunachal Pradesh Vidya Kendra to provide education for underprivileged children • Worked with the Karavir Nagar Vachan Mandir in Kolhapur, Maharashtra to convert the library into an e-library and connected it to other libraries around the world • Supplied Chandamama books every month to schools in rural areas to inculcate reading habit among rural students • Partnered with Vela School in Villupuram in Tamil Nadu, Cochlea Trust in Pune and Helpers of the Handicapped in Kolhapur to promote education among children with disabilities • Started a Book Bank to support academics and reduce the burden of expenditure in a few towns in Karnataka • Partnered with Prerna, an NGO, in Bangalore and Delhi for education of street children

• Sponsored more than 5,000 students, through NGOs like Prerna and Vidya Poshak, for the study and documentation of Karana Viniyoga, to preserve and encourage the art. Karana is a dance form defined and described in great detail by sage Bharatha in his work Natyashastra. • Supported the Bhandarkar Oriental Research Institute in researching ancient Indian manuscripts • Sponsored Uppina Kudru Kamath Memorial Yakshagana Gombeyatta puppet shows in Karnataka to preserve the art of puppetry

Rural upliftment • Conducted relief work for the flood victims in Kerala and Orissa • Sponsored the construction of a suspension foot bridge in Mundaje in Mangalore, Karnataka • Continued to work on rehabilitating devadasis and their children through education and training in Raichur, Karnataka • Destitute widows and physically challenged women in rural Karnataka are being empowered in collaboration with an NGO called RAPID • Provided free food to orphan children at Chamarajanagar, Mysore, Bangalore (all in Karnataka), Salem in Tamil Nadu and Orissa

Grants by Infosys to the Foundation The grants made during the last three years are given below: in Rs. crore

Healthcare • Completed the construction of an advanced pediatric block at Wenlock Hospital in Mangalore and a Community Eye Centre within the premises of the Shankar Nethralaya in Bangalore

Grants 20.00 19.00 13.25

2008 2007 2006

• Donated medical equipment and medicines to the Trivandrum Regional Cancer Centre, Salem Charitable Hospital and Jammu Hospital. The Foundation has spread its donations to various other hospitals in Karnataka and Maharashtra where poor patients are treated for free.

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Report on environment, health and safety Infosys believes that our infrastructure and facilities strategy should consider the environmental issues and be seen as a company that promotes ecological balance while maintaining operational efficiencies.

OZONE – The Health, Safety and Environmental (HSE) Management System at Infosys OZONE was initiated in 2003 to promote and manage environmental issues and employee health and safety. The Health, Safety and Environment (HSE) policy of Infosys covering employees, contractual employees and visitors states: “Infosys as a corporate citizen is committed to demonstrating a high standard of environmental protection, sharing of best practices and provision of a safe and healthy workplace.” To achieve this, we shall work toward: • Conservation of resources • Prevention of pollution • Adherence to all applicable legislations • Eliminating accidents and occupational illnesses and injuries. We will work with various stakeholders towards continual improvement of our environmental, health and safety management system. We shall meet mandated health and safety requirements as a minimum and strive to go beyond regulatory limitations to become a leader in environment, health and safety management.” We are also ISO 14000 (ISO 14001: 2004) and OHSAS 18001: 1999 compliant at eight of our development centers in India. The OZONE initiative achieved the following this year: • Awareness: Equipped 11,266 employees and 4,175 trainees with an understanding on the environment, health and safety policy of Infosys and led to their taking responsibility through pledging their support for the initiative. • Water: The per capita consumption of water at 2.9 KL per month reduced by 5% from last year. 100% of water is recycled and reused. We plan to introduce initiatives to reduce consumption by 25% in the near future. • Paper: 8% reduction in consumption of paper. Our goal in the medium term is to reduce it by 25%. • Energy: Per capita consumption maintained at an optimum 273 units per month. Solar water heaters are used in our hostel facilities at Bangalore, Mysore, Pune, Chandigarh, Bhubaneswar and Hyderabad. Efforts are on to identify other potential areas to use renewable energy. Our goal is to reduce energy consumption by 25% in the near future. • Carbon emissions: We recommend that employees use public or Infosys buses to commute to work. We operate 463 buses and 24,633 employees comprising 34% of our total employee strength avail this service. 50% (35,193) employees use public transport and 16% use personal vehicles. We plan to provide incentives for car pooling. We see renewable energy as one of the effective tools to achieve our commitment of carbon neutrality and we have initiated evaluating options suitable at various campuses. Our target is to reduce 10% of our energy-related greenhouse gas emissions in the near future. • Waste management: We continue with our best practices on waste segregation and disposal of solid waste. We educate our vendors on ethical processes. The usage of plastic and thermocol has been reduced by 90% in the campuses. Food waste is sent to the piggeries. • E-waste: Though there is no legislation in India on e-waste, we adhere to the Hazardous Waste (Management and Handling) Rules. Recently, a guideline on e-waste has been released by the Central Pollution Control Board (CPCB) which has been approved by the Ministry of Environment and Forests. E-waste at Infosys is sent to recyclers who have valid approvals / consents from the local Pollution Control Board and CPCB. The Management’s plans

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to ensure safe disposal of e-waste are in place and we propose to dispose 20% of our e-waste next year. Biodiversity is the foundation of life on earth and one of the pillars of sustainable development. The conservation and sustainable use of biodiversity is an essential element of our site selection strategy. Most of our campuses have large green tracts of land. We have over 40,000 trees above the height of 1.5 meters and are proposing to grow one tree for every new hire. Besides ornamental trees, we are now committed to growing aromatic, aquatic, fruit bearing and medicinal plants. We use organic fertilizer for our landscaping requirements. We have taken the climate change challenge very seriously and have set up a dedicated Green Team that is working toward sustainable development. All our future buildings will comply with a minimum of Gold rating as per the IGBC LEEDs rating system which defines the standards and measures for sustainable buildings. Our approach is to use an integrated design process to ensure that the architectural elements and the engineering systems work effectively together. We want to reduce our dependence on mechanical systems and are therefore applying passive and active solar design principles in our buildings. Energy saved is energy generated. We have embarked on an aggressive plan to improve the performance of existing buildings across our campuses. In addition, we are evaluating opportunities to procure electricity via renewable technologies such as wind, mini-hydro and solar.

Health Assessment and Lifestyle Enrichment (HALE) Plan The Health Assessment and Lifestyle Enrichment Plan (HALE) initiative focuses on increasing the emotional value-add of our employees, by optimizing their health, quality of life and work environment. The goal is to ensure healthy and happy employees who will be more productive and in the long term, add to our competitive edge in business. HALE strove to achieve this goal last year through a set of offerings that focused on health, safety, stress and leisure. HALE activities were deployed through multiple channels: • An interactive portal and quizzes that provided a wealth of knowledge and stimulated Infoscions on thinking “healthy and happy”. • A comprehensive health and well-being plan for employees which consisted of offerings such as preventive healthcare options for employees and families, health checks, talks, consultations, fitness related interventions, and health awareness campaigns. Last year, 55 health-related events were conducted in which 13,200 employees participated. • The HALE Health Week, comprising yearly master health check-ups and focused health and stress campaigns, was conducted in our campuses during March 2008. Over 6,000 employees underwent medical check-ups and specialist consultations. Approximately 10,000 employees used the online interventions related to the Health Week which included an online health hunt, a health quiz and specialist doctors’ discussions on Infy TV. • Workshops and talks by experts on first aid, trauma handling and CPR helped our employees in case of emergencies. Over 12,000 employees were benefitted by these workshops. • A hotline help and the HALE Tool aim to provide timely, expert help to employees and their families on issues related to relationships, stress, depression and personal issues. A stress audit which had over 8,000 responses over the last year, a pilot rollout of the EAP (Employee Assistance programme), and topical workshops on relationships, families and work-life balance were also organized. • An annual safety week is also conducted across DCs. Our environment and health events also encourage contractual employees to participate, and we have initiated subsidized annual health check-ups for them.

Financial statements (unaudited) presented in substantial compliance with GAAP requirements of various countries and International Financial Reporting Standards and reports of substantial compliance with the respective corporate governance standards Over the past decades, the technology and information revolutions have fundamentally transformed economic and political relationships between nations. Thanks to the opening up of financial markets across the globe, investors today have a wide choice of capital markets to invest in. Consequently, the global investor must have access to information about the performance of any company, in any market that he or she chooses to invest in. However, differences in language, accounting practices, and reporting requirements in various countries render performance reports by many companies rather investorunfriendly. Today, the strength of a global company lies in its ability to access high-quality capital at the lowest cost from a global pool of investors. Such companies study the needs of global investors and publish financial information in a language and form understood by their existing as well as prospective investors. In the process, financial statistics may have to be restated and financial terminology may need to be translated. Indeed, a key issue in international financial analysis is the restatement and translation of financial reports that describe operations conducted in one environment, but which are the subject of review and analysis in another. As an investor-friendly company, committed to the highest standards of disclosure, we have been voluntarily providing unaudited financial statements presented in substantial compliance with the GAAP requirements of Australia, Canada, France, Germany, Japan and the United Kingdom, besides those of the United States and India. Australia, France, Germany and the United Kingdom have adopted the International Financial Reporting Standards (IFRS). We are presenting the unaudited consolidated financial statements for these countries presented in substantial compliance with IFRS. Financial information presented in Japanese GAAP in this Annual Report has been translated from our US GAAP financial information. The information will be included in the Securities Report to be filed with the Ministry of Finance, Japan. Canadian GAAP financial statements have been presented on the same basis as earlier years and are reconciled to our Indian GAAP financial information. Further, keeping in mind their local regulations and practices, these countries have formulated their own corporate governance standards. We have provided statements on substantial compliance with these standards in the respective national languages of these countries. The International Financial Reporting Standards (IFRS) are gaining the attention of companies, regulators and investing communities across the globe. Many countries have adopted IFRS and some of them, including India, are in the process of adopting the same. Recently, the US Securities and Exchange Commission (SEC) permitted Foreign Private Issuers to file financial statements in accordance with IFRS without any reconciliation with US GAAP. SEC is in the process of announcing a framework and rules for adoption of IFRS by domestic companies in the US. We have evaluated the requirements of IFRS and believe that we are fully prepared to adopt IFRS. However, we will

await the final framework and rules for adoption of IFRS Securities and Exchange Commission, US for domestic companies before we adopt the same. In the interim, we are providing the balance sheet and income statement in substantial compliance with IFRS in this section. The unaudited consolidated income statements and balance sheets have been presented by converting the various financial parameters, reported in our income statement, into the respective currencies of the above countries. In addition, appropriate adjustments have been made for differences, if any, in accounting principles, and in formats, between India, United States, these countries and IFRS.

Corporate governance report – Australia, Canada, France, Germany, Japan and the United Kingdom Australia ASX Corporate Governance Council – Principles of good corporate governance and best practices recommendations The Australian Stock Exchange (ASX) Corporate Governance Council was formed on August 15, 2002 to develop and deliver an industry-wide, support framework for corporate governance which could provide a practical guide for listed companies, their investors, the wider market and the Australian community. The council published its “principles of good corporate governance and best practice recommendations” in March 2003. The corporate governance principles and recommendations of the council are not mandatory, but Australian listed entities must disclose those principles that are not in compliance and the reasons for non-compliance. The council proposed 10 core principles which it believes underlie good corporate governance. We comply substantially with all recommendations made by the council, except the following : 1. Recommendation 2.2 – The Chairperson should be an independent director: The chairman of the board is a non-executive director. The board of the Company consists of six executive directors, one non-executive director and eight independent directors. The audit committee, nominations committee and the compensation committee consist of independent directors only. 2. Recommendation 5.1 – Ensure compliance with ASX listing rule disclosure requirements: We are not listed on the Australian Stock Exchange. However, we have established necessary policies and procedures to ensure that announcements are made in a timely manner, are factual, do not omit any material information and are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.

The financial information provided in this section is unaudited. Financial information presented in substantial compliance with the GAAP requirements of countries and IFRS may not meet all the regulatory requirements to be characterized as financial statements presented in explicit and unreserved compliance with such requirements. The statements on compliance or substantial compliance with corporate governance standards of various countries may not meet all the relevant regulatory requirements to be characterized as statements of explicit and unreserved compliance with corporate governance requirements. The financial information provided in this section does not contain sufficient information to allow full understanding of our results or our state of affairs. In the event of a conflict in interpretation, the “Audited Indian GAAP financial statements” section and the “Corporate governance report” of the Annual Report should be considered. We caution investors that these reports are provided only as additional information to our global investors. Using such reports for predicting our future, or of any other company, is risky. We are not responsible for any direct, indirect or consequential losses suffered by any person using these corporate governance reports, financial statements or data.

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Canada Corporate governance: A guide to good disclosure, issued by Toronto Stock Exchange In December 2003, The Toronto Stock Exchange (TSX) issued guidelines which would help issuers prepare meaningful disclosure that complies with its requirements. TSX only requires companies to explain their practices, and not to adopt the practices in the guidelines. These guidelines were updated in January 2006. We substantially comply with all recommendations. The necessary disclosures on various recommendations are provided elsewhere in the report. In addition, the following disclosures are made for specific guidelines issued by TSX.

Dieser Bericht hat einige Empfehlungen ausgesprochen. Ihr Unternehmen wendet die Empfehlungen der Regierungskommission im Wesentlichen mit folgenden Ausnahmen an: 1. Empfehlung 3, 4 und 5 – Das duale System der Unternehmensorgane: Das Unternehmen hat ein einstufiges Verwaltungsorgan welches sowohl mit unternehmerischen Befugnissen als auch der Befugnis zur Überwachung ausgestattet ist. Zurzeit besteht das Organ aus 15 unabhängigen Direktoren davon 6 leitende, 1 nicht-leitenden und 8 unabhängige Angestellte. Das Unternehmensorgan ist ausschließlich mit unabhängigen Direktoren besetzt.

Japan

1. Guideline 5 – Assessing the Board’s effectiveness: The compensation committee of the Board consists of independent directors. The committee reviews the performance of all the executive directors on a quarterly basis, based on detailed performance parameters set for each of the executive directors at the beginning of the year, in consultation with the CEO of the Company. The performance of the independent directors is reviewed by the full board, on a regular basis. The nominations committee recommends size and composition of the Board and its committees, establishes procedures for the nomination process, and recommends candidates for election to the Board and its committees.

France La gouvernance d’entreprise des sociétés cotées – Octobre 2003

United Kingdom

Les principes de la gouvernance d’entreprise des sociétés cotées tirent leur origine des rapports VIENOT de juillet 1995 à juillet 1999, ainsi que du rapport BOUTON de septembre 2002. Cet ensemble de recommandations a été élaboré en détail par les groupes de travail en résumé des réunions avec les présidents de sociétés cotées en France et ce, sur la demande de l’Association Française des Entreprises Privées (AFEP) et le Mouvement des Entreprises Françaises (MEDEF). Cette “consolidation” des travaux menés par des présidents de grandes sociétés françaises constitue une réponse à la communication de la Commission européenne sur la gouvernance d’entreprise et le droit des sociétés, qui préconise que chaque État membre désigne un code de référence auquel les entreprises devront se conformer ou expliquer en quoi leurs pratiques en diffèrent et pour quelles raisons.

The combined code on corporate governance supersedes and replaces the Combined Code issued by the Hampel Committee on Corporate Governance in June 1998. It is derived from a review of the role and effectiveness of non-executive directors by Mr. Derek Higgs and a review of audit committees by a group led by Sir Robert Smith. This new Code applies for reporting years beginning on or after November 1, 2003.

Ce rapport avait fait plusieurs recommandations. Notre entreprise se conforme strictement à ces recommandations, à l’exception des points ci-dessous: 1. Recommandation 7.1 – La représentation des salariés et des salariés actionnaires: Les salariés ne sont pas représentés au conseil d’administration. À ce jour, le conseil d’administration d’INFOSYS est composé de 15 administrateurs dont 8 sont indépendants.

Germany deutscher Corporate Governance Kodex in der geltenden Fassung vom 14. Juni 2007 Der deutsche Corporate Governance Kodex repräsentiert ein Regelungswerk für Vorstände und Aufsichtsrat von in Deutschland börsennotierten Gesellschaften. Die Regeln haben zum Ziel, das deutsche Corporate Governance System transparenter und verständlicher zu machen. Zweck ist, für das Vertrauen der internationalen und nationalen Investoren, der Kunden, der Mitarbeiter und der Öffentlichkeit in die Vorstände und Aufsichtsräte börsennotierter Unternehmen zu werben.

142 |

Power of talent

We substantially comply with all recommendations of the combined code except for the following: 1. Code A2.2: A chief executive should not go on to become chairman of the same company: N. R. Narayana Murthy is the Chairman and Chief Mentor of the Company, at present. He was the Chief Executive Officer of the Company till March 31, 2002. 2. Code D1: Dialogue with institutional investors: We have in place a communication policy addressed to the needs of all investors. We communicate to investors through various forums, both our long-term and short-term plans and strategies. As a policy, we do not differentiate between small and large investors. Non-executive directors do not meet with large investors as required under the code. 3. Code D2.1 – Voting in shareholders meetings: Under Indian law, voting on a resolution in the annual general meeting is by show of hands, unless a poll is demanded by a member or members present in person or by proxy, holding at least one-tenth of the total shares entitled to vote on the resolution, or by those holding an aggregate paid up capital of at least Rs. 50,000. However, as an informal mechanism, the Company makes available non-mandatory ballot through the internet, for all the resolutions to be passed by the members at the AGM and announces the results of the poll, before taking up the formal procedure for passing a resolution by members in the meeting.

Financial statements presented in substantial compliance with Australian Accounting Standards (AASBs) Consolidated balance sheet of Infosys Technologies Limited as at March 31 (unaudited), Australian Dollars (AUD) in million, except share and per share data

Assets Property, plant and equipment Intangible assets Deferred tax assets Advance income taxes Other assets Total non-current assets Cash and cash equivalents Investments in liquid mutual fund units Trade accounts receivable Unbilled revenue Prepaid expenses and other current assets Total current assets Total assets Liabilities Non-current liabilities Total non-current liabilities Trade payable Current tax payable Client deposits Unearned revenue Other liabilities Total current liabilities Total liabilities Net current assets Equity Common stock, INR Rs. 5/- par value 600,000,000 equity shares authorized, issued and outstanding – 571,995,758 and 571,209,862 as of March 31, 2008 and 2007 respectively Additional paid-in capital Reserves Retained earnings Total equity attributable to equity holders of the Company Minority interests Total equity

2008

2007

1,119 192 74 60 49 1,494 2,254

911 183 26 41 46 1,207 1,731

20 902 131

7 697 91

117 3,424 4,918

59 2,585 3,792

12 12 13 110 1 78 423 625 637 2,799

1 1 7 5 1 89 337 439 440 2,146

79 805 332 3,065

79 875 111 2,287

4,281 – 4,918

3,352 – 3,792

Consolidated income statement of Infosys Technologies Limited for the year ended March 31 (unaudited), AUD in million, except share and per share data

2008 2007 Sales 4,771 4,009 Cost of sales 2,802 2,305 Gross profit 1,969 1,704 Other income 198 98 Selling and marketing expenses 263 271 General and administrative expenses 382 323 Amortization of intangible assets 9 4 Results from operating activities 1,513 1,204 Net finance income / (costs) 2 10 Profit before income taxes 1,515 1,214 Income tax expense 195 109 Profit for the period 1,320 1,105 Net profit attributable to minority interest – 3 Net profit attributable to shareholders of parent company 1,320 1,102 Earnings per share (AUD) Basic 2.32 1.99 Diluted 2.31 1.95 Weighted average number of shares used in computing earnings per equity share Basic 568,564,740 554,018,739 Diluted 570,368,975 566,110,582 Note: 1. The functional currency of the Company is the Indian Rupee. These financial statements have been presented by translating revenue and expenditure at an average rate during the year; current assets, current liabilities, property, plant and equipment, long-term borrowings at the year-end rate; and accretions to stockholders’ equity at an average rate for the year. The difference arising on translation is shown under Reserves. 2. Exchange rates (1 AUD =) in Rs.

2008 35.01 36.55

Average rate Period end rate

2007 34.73 34.93

3. Reconciliation between US GAAP and A-IFRS statements AUD in million

Net income as per US GAAP financial statements Reversal of stock compensation charge using fair value method for grants before November 7, 2002 Net income attributable to shareholders of parent company as per AASBs

2008

2007

1,320

1,101

–

1

1,320

1,102

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Financial information presented in substantial compliance with GAAP requirements of Canada Consolidated balance sheet (unaudited) as at March 31,

Consolidated statement of earnings and retained earnings (unaudited)

Canadian dollars (CAD) in million, except share and per share data

CAD in million, except share and per share data

Assets Current Assets Cash and cash equivalents Investments in liquid mutual fund units Trade accounts receivable Unbilled revenue Prepaid expenses and other current assets Deferred tax assets Total current assets Property, plant and equipment Goodwill Intangible assets, net Deferred tax assets Advance income taxes Other assets Total assets Liabilities and stockholders’ equity Current liabilities Accounts payable Income taxes payable Client deposits Unearned revenue Other current liabilities Total current liabilities Non-current liabilities Other non-current liabilities Parent company stockholders’ equity Common stock, INR Rs. 5/- par value 600,000,000 equity shares authorized, issued and outstanding – 571,995,758 and 571,209,862 as of March 31, 2008 and 2007 respectively Additional paid-in capital Accumulated other comprehensive income Retained earnings Total parent company stockholders’ equity Minority interests Total equity Total liabilities and stockholders’ equity

2008

2007

2,115

1,598

18 847 123

7 644 84

110 2 3,215 1,050 154 26 68 56 46 4,615

55 2 2,390 841 146 23 22 37 42 3,501

12 104 1 73 397 587

7 5 1 82 310 405

11

1

Sales Cost of sales Gross margin Expenses Selling, general and administration expenses Income from operations Provision for investments Interest and other income Gain on sale of long term investment Earnings before income taxes Provision for income taxes Net earnings before minority interests Minority interests Net earnings after minority interests Cash dividend declared Retained earnings, beginning of the year Retained earnings, end of the year Earnings per share (CAD) Net earnings Basic Fully diluted Weighted average number of shares Basic Fully diluted

2008 4,277 2,512 1,765

2007 3,505 2,016 1,489

586 1,179 – 179

523 966 – 94

– 1,358 175

1 1,061 95

1,183 – 1,183 570 613

966 2 964 189 775

2,376 2,989

1,601 2,376

2.08 2.07

1.74 1.70

568,564,740 554,018,739 570,368,975 566,110,582

Note:

73 756

73 809

199 2,989

(163) 2,376

4,017 – 4,017

3,095 – 3,095

4,615

3,501

1. The functional currency of the Company is the Indian Rupee. These financial statements have been presented by translating revenue and expenditure at an average rate for the year; current assets, current liabilities, property, plant and equipment, long-term borrowings at the year-end rate; and accretions to stockholders’ equity at an average rate for the year. The difference arising on translation is shown under accumulated foreign currency translation adjustment. 2. Exchange rate (1 CAD =) in Rs.

Average rate Period end rate

2008 39.06 38.95

2007 39.73 37.38

3. Reconciliation between US GAAP and the Canadian GAAP statements: CAD in million

Net income as per US GAAP in Canadian dollars Net earnings as per Canadian GAAP

144 |

Power of talent

2008 1,183

2007 964

1,183

964

Etats financiers préparés en conformité avec les IFRS (International Financial Reporting Standards) – France Compte de résultat consolidé non audité d'Infosys Technologies Ltd pour les exercices clos les 31 mars en millions d'Euros, sauf résultat par action

ACTIF Actif Circulant Disponibilités Valeurs mobilières de placement Clients, net de provisions Factures à établir Charges constatées d’avance et autres actifs circulants Total de l’actif circulant Installations techniques, matériels et outillages industriels, net Fonds commercial et immobilisations incorporelles, net Impôts différés actif Impôts avance Autres actifs Total non circulant actifs Total Actif Capital et reserves Passif circulant Fournisseurs Impôts sur les bénéfices Acomptes clients Produits constatés d’avance Autres passifs provisionnés Total du passif circulant Passif non circulant Autres passifs non circulants Capitaux propres Capital social Prime d émission Ecart de conversion Report à nouveau Total des capitaux propres – part du groupe Total passif et capital et réserves

2008

2007

1,302 11 521 76

1,049 4 422 56

70 1,980

36 1,567

647

552

111 43 35 26 862 2,842

111 16 25 27 731 2,298

8 63 1 45 244 361

4 3 1 54 203 265

7

1

48 466 189 1,771

48 531 67 1,386

2,474 2,842

2,032 2,298

en millions d'Euros, sauf résultat par action

2008 2007 Produits 2,918 2,389 Coût des ventes 1,714 1,374 Résultat brut 1,204 1,015 Charges d’Exploitation 400 356 Autres produits, nets 2 7 Produits d’exploitation 806 666 Produits financiers 121 58 Résultat avant impôts 927 724 Impôts sur les bénéfices 120 65 Résultat net 807 659 Résultat net attribué aux intérêts minoritaires – 2 Résultat net part du groupe 807 657 Bénéfice par action Base 1.42 1.19 Dilué 1.42 1.16 Nombre moyen pondéré d’actions Base 568,564,740 554,018,739 Dilué 570,368,975 566,110,582 Note: 1. Les comptes annuels de la société on été préparés en roupie indiens, la devise opérationnelle. Ces comptes annuels ont été préparés en traduisant des produits et charges avec un taux moyen pendant l’année, l’actif courant, le passif courant, les installations techniques, matériels et outillages industriels, les emprunts à long terme, avec un taux moyen pour l’année. La différence obtenue avec la conversion est comptabilisée dans les écarts de conversion. 2. Taux de change (1Euro =) en Rs.

2008 57.24 63.25

Moyenne Clôture

2007 58.29 57.64

3. Réconciliation avec les états US GAAP et IFRS en million d’Euros, sauf mention contraire

Résultat net en millions selon les comptes annuels consolidés US GAAP Résultat net selon les normes IFRS

2008

2007

807 807

657 657

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Absschluss erarbeitet in wesentlicher Übereinstimmung mit den International Financial Reporting Standards (IFRS) – Deutschland millionen Euro, außer Aktien und je Aktie Daten

31. März 2008 Aktiva Kurzfristige Vermögenswerte Zahlungsmittel und Zahlungsmitteläquivalente Investitionen in liquide wechselseitige Fonds Forderungen aus Lieferungen und Leistungen Forderungen aus Fertigungsaufträgen Vorauszahlungen und sonstige Vermögenswerte Kurzfristige Vermögenswerte insgesamt Sachanlagen Geschäfts- und Firmenwert (Goodwill) Sonstige immaterielle Vermögenswerte Latente Steuern Vorausgezahlte Steuern Sonstige Vermögenswerte Summe Aktiva Passiva: Kurzfristige Schulden Verbindlichkeiten aus Lieferungen und Leistungen Steuerverbindlichkeiten Kundendeposita / Erhaltene Anzahlungen Verbindlichkeiten aus Fertigungsaufträgen Sonstige Verbindlichkeiten / Rückstellungen Kurzfristige Schulden insgesamt Langfristige schulden Sonstige langfristige Schulden Eigenkapital Gezeichnetes Kapital, 600,000,000 Aktien je Rupie 0.13 Nominalwert genehmigt, zum 31. März 2008 insgesamt 571,995,758 (i.Vj. 571,209,862) Aktien ausgegeben und im Umlauf befindlich Kapitalrücklage Sonstige Rücklagen (accumulated other comprehensive income) Bilanzgewinn Eigenkapital, das den Anteilseignern der Infosys Technologies AG zuzuordnen ist Minderheitenanteile Summe Eigenkapital Summe Passiva

31. März 2007

Konzern-Gewinn- und Verlustrechnung der Infosys Technologies Limited für die Zeit vom 1. April 2007 bis zum 31. März 2008 millionen Euro, außer aktien und je aktie daten

1,302

1,049

11

4

521

422

76

56

70

36

1,980 647

1,567 552

95

96

16 43 35 26 2,842

15 16 25 27 2,298

8 63

4 3

1

1

45

54

244 361

203 265

7

1

48 466

48 531

189 1,771

67 1,386

Umsatzerlöse Umsatzkosten Bruttoergebnis vom Umsatz Operative Aufwendungen: Vertriebskosten Allgemeine Verwaltungskosten Abschreibungen auf immaterielle Vermögenswerte Operative aufwendungen insgesamt Operatives Ergebnis Gewinn bei Verkauf von langfristigen Vermögenswerten Währungsgewinne /-verluste Sonstige betriebliche Erträge Ergebnis vor Steuern und Minderheiten Steuern von Einkommen und Ertrag Periodenergebnis Das Periodenergebnis verteilt sich wie folgt Minderheitenanteile Periodenergebnis der Aktionäre Ergebnis je Aktie Unverwässert Verwässert Gewichtete durchschnittliche Anzahl aktien für die Berechnung der Ergebnisse je aktie Unverwässert Verwässert

Power of talent

2007 2,389 1,374 1,015

161 233

162 192

6 400 804

2 356 659

– 2 121

1 6 58

927 120 807

724 65 659

– 807

2 657

1.42 1.42

1.19 1.16

568,564,740 554,018,739 570,368,975 566,110,582

Anmerkungen: 1. Umrechnung von Auslandswährungen

Der Abschluss (Bilanz sowie Gewinn- und Verlustrechnung) wird in der Berichtswährung der indischen Rupie erstellt, der funktionalen Währung. Der vorliegende und in Euro dargestellte Abschluss wurde erstellt durch die Umrechnung der Erträge und Aufwendungen zum Jahresdurchschnittskurs; Umlaufvermögen, kurzfristige Verbindlichkeiten, Grundstücke, Maschinen und Anlagen sowie langfristige Verbindlichkeiten zum Jahresendkurs, Erhöhungen des Eigenkapitals zum Jahresdurchschnittskurs. Die Differenz aus Währungsumrechnungen wird unter den sonstigen Rücklagen (“Other comprehensive Income”) ausgewiesen.

2. Verwendete Wechselkurse (1 =)

2,474 – 2,474 2,842

2,032 – 2,032 2,298

in Rs.

Verwendeter durchschnittlicher Wechselkurs Verwendeter Jahresendwechselkurs

2008

2007

57.24 63.25

58.29 57.64

3. Überleitung von US GAAP auf IFRS in millionen Euro

Periodenergebnis nach US GAAP Periodenergebnis nach IFRS

146 |

2008 2,918 1,714 1,204

2008 807 807

2007 657 657

Financial statement presented in substantial compliance with GAAP requirements of Japan

 

 

   

 

 

 

　

　 　

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Financial statements presented in substantial compliance with International Financial Reporting Standards (IFRS) – United Kingdom Consolidated balance sheet of Infosys Technologies Limited as at March 31 (unaudited), United Kingdom Pound Sterling (GBP) in million, except share and per share data

Assets Current assets Cash and cash equivalents Investments in liquid mutual fund units Trade accounts receivable Unbilled revenue Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Intangible assets Deferred tax assets Advance income taxes Other assets Total non-current assets Total assets Liabilities and stockholders’ equity Current liabilities Accounts payable Income taxes payable Client deposits Unearned revenue Other current liabilities Total current liabilities Non-current liabilities Other non-current liabilities Parent company stockholders’ equity Common stock, INR Rs. 5/par value 600,000,000 equity shares authorized, issued and outstanding – 571,995,758 and 571,209,862 as of March 31, 2008 and 2007 respectively Additional paid-in capital Accumulated other comprehensive income Retained earnings Total parent company stockholders’ equity Total liabilities and stockholders’ equity

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Power of talent

2008

2007

1,037

713

9 415 60

3 287 38

54 1,575

24 1,065

515 88 34 28 22 687 2,262

375 75 11 17 19 497 1,562

6 51 1 36 194 288

3 2 1 37 138 181

5

1

33 371

33 361

155 1,410

45 941

1,969

1,380

2,262

1,562

Consolidated profit and loss account of Infosys Technologies Limited for the year ended March 31 (unaudited), GBP in million, except share and per share data

2008 2007 Revenues 2,075 1,619 Cost of sales 1,219 931 Gross profit 856 688 Operating expenses 284 242 Other income 1 5 Results from operating activities 573 451 Finance income, net 86 39 Profit before income taxes 659 490 Income tax expense 85 44 Profit for the year 574 446 Net income attributable to minority interest – 1 Net income attributable to shareholders of parent company 574 445 Profit for the year 574 446 Earnings per equity share (GBP) Basic 1.01 0.80 Diluted 1.01 0.79 Weighted average equity shares used in computing earnings per equity share Basic 568,564,740 554,018,739 Diluted 570,368,975 566,110,582 Reconciliation between US GAAP and IFRS statements GBP in million

Net income as per US GAAP financial statements Net income attributable to shareholders of parent company as per IFRS

2008

2007

574

445

574

445

Financial statements presented in substantial compliance with International Financial Reporting Standards (IFRS) Consolidated balance sheet of Infosys Technologies Limited as at March 31 (unaudited),

Consolidated income statement of Infosys Technologies Limited for the year ended March 31 (unaudited),

in Rs. million, except share and per share data

in Rs. million, except share and per share data

Assets Current assets Cash and cash equivalents Investments in liquid mutual fund units Trade accounts receivable Unbilled revenue Prepaid expenses and other current assets Total current assets Property, plant and equipment Intangible assets Deferred tax assets Advance income taxes Other assets Total non-current assets Total assets Liabilities and stockholders’ equity Current liabilities Accounts payable Income taxes payable Client deposits Unearned revenue Other current liabilities Total current liabilities Non-current liabilities Other non-current liabilities Parent company stockholders’ equity Common stock, INR Rs. 5/par value 60,00,00,000 equity shares authorized, issued and outstanding – 57,19,95,758 and 57,12,09,862 as of March 31, 2008 and 2007 respectively Additional paid-in capital Accumulated other comprehensive income Retained earnings Total parent company stockholders’ equity Total liabilities and stockholders’ equity

2008

2007

82,361

60,469

720 32,977 4,803

259 24,352 3,189

4,282 125,143 40,900 7,004 2,721 2,201 1,801 54,627 179,770

2,069 90,338 31,808 6,379 905 1,422 1,594 42,108 132,446

480 4,042 40 2,841 15,448 22,851

259 172 43 3,103 11,723 15,300

441

43

2,759 29,435

2,759 30,556

12,248 112,036

3,879 79,909

156,478

117,103

179,770

132,446

2008 2007 Revenues 167,040 139,235 Cost of sales 98,100 80,026 Gross profit 68,940 59,209 Operating expenses 22,880 20,773 Other income 80 405 Results from operating activities 46,140 38,841 Finance income, net 6,920 3,380 Profit before income taxes 53,060 42,221 Income tax expense 6,840 3,785 Profit for the year 46,220 38,436 Net income attributable to minority interest – 90 Net income attributable to shareholders of parent company 46,220 38,346 Profit for the year 46,220 38,436 Earnings per equity share (Rs.) Basic 81.29 69.21 Diluted 81.04 67.74 Weighted average equity shares used in computing earnings per equity share Basic 56,85,64,740 55,40,18,739 Diluted 57,03,68,975 56,61,10,582 Reconciliation between US GAAP and IFRS financial statements (unaudited) in Rs. million

Net income as per US GAAP financial statements Reversal of Stock compensation charge using fair value method for grants before November 7, 2002 Fringe Benefit Tax Net income as per IFRS

2008

2007

46,200

38,301

– 20 46,220

45 – 38,346

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Extract of Audited US GAAP Financial statements During the year, NASDAQ modified its rules relating to dispatch of annual reports to ADR holders. Under the amended rules, a company can host the annual report on its website, in lieu of physical distribution. We have decided to adopt this rule and accordingly have made the annual report and the filing with the US Securities and Exchange Commission (SEC) in Form 20-F available on our website www.infosys.com. However, a physical copy will be made available to shareholders on request. Consequent to this, we are not circulating the Form 20-F filing with SEC to our shareholders in India, but the same would be made available to shareholders on request. However, the extract of the audited balance sheet and income statement as per US GAAP is provided here under:

Consolidated balance sheet of Infosys Technologies Limited as at March 31,

Consolidated income statement of Infosys Technologies Limited for the year ended March 31,

United States Dollars (US $) in million, except share and per share data

US $ in million, except share and per share data

Assets Current assets Cash and cash equivalents Investments in liquid mutual fund units Trade accounts receivable Unbilled revenue Prepaid expenses and other current assets Deferred tax assets Total current assets Property, plant and equipment Goodwill Intangible assets, net Deferred tax assets Advance income taxes Other assets Total assets Liabilities and stockholders’ equity Current liabilities Accounts payable Income taxes payable Client deposits Unearned revenue Other current liabilities Total current liabilities Non-current liabilities Other non-current liabilities Parent company stockholders’ equity Common stock, INR Rs. 5/par value 600,000,000 equity shares authorized, issued and outstanding – 571,995,758 and 571,209,862 as of March 31, 2008 and 2007 respectively Additional paid-in capital Accumulated other comprehensive income Retained earnings Total parent company stockholders’ equity Minority interests Total equity Total liabilities and stockholders’ equity

150 |

Power of talent

2008

2007

2,058

1,403

18 824 120

6 565 74

107 2 3,129 1,022 150 25 66 55 45 4,492

48 2 2,098 738 128 20 19 33 37 3,073

$12 101 1 71 386 571

$6 4 1 72 272 355

11

1

2008 2007 Revenues 4,176 3,090 Cost of sales 2,453 1,777 Gross profit 1,723 1,313 Operating expenses Selling and marketing expenses 230 209 General and administrative expenses 334 249 Amortization of intangible assets 8 3 Total operating expenses 572 461 Results from operating activities 1,151 852 Gain on sale of long-term investment – 1 Foreign currency exchange gains / (losses), net 2 8 Other income, net 173 75 Profit before income taxes 1,326 936 Provision for income taxes 171 84 Profit for the period 1,155 852 Net income attributable to minority interest – 2 Net income attributable to shareholders of parent company 1,155 850 Profit for the period 1,155 850 Earnings per equity share (US $) Basic 2.03 1.53 Diluted 2.02 1.50 Weighted average equity shares used in computing earnings per equity share Basic 568,564,740 554,018,739 Diluted 570,368,975 566,110,582 Note:

64 718

64 692

311 2,817

90 1,871

3,910 – 3,910

2,717 – 2,717

4,492

3,073

1. The functional currency of the Company is the Indian Rupee. These financial statements have been presented by translating revenue and expenditure at an average rate during the year; current assets, current liabilities, property, plant and equipment, long-term borrowings at the year-end rate; and accretions to stockholders’ equity at an average rate for the year. The difference arising on translation is shown under accumulated other comprehensive income. 2. Exchange rates (1 US $ =) in Rs.

Average rate Period end rate

2008 40.00 40.02

2007 45.06 43.10

Global presence North America United States Atlanta 400 Galleria Parkway Suite 1490, Atlanta GA 30339 Tel.: 1 770 980 7955 Fax: 1 770 980 7956

Bellevue 3326 160th Avenue SE Suite 300, Bellevue WA 98005 Tel.: 1 425 452 5728 Fax: 1 425 452 8440

Bridgewater 400 Crossing Boulevard Suite 101 Bridgewater, NJ 08807 Tel.: 1 908 450 8200 Fax: 1 908 450 8201

Charlotte 900 West Trade Street Suite 750 Charlotte, NC 28202 Tel.: 1 704 264 1535 Fax: 1 704 264 1600

Fremont 6607 Kaiser Drive Fremont, CA 94555 Tel.: 1 510 742 3000 Fax: 1 510 742 3090

Hartford 95 Glastonbury Blvd Somerset Square Glastonbury CT 06033 Tel.:1 860 494 4139 Fax:1 860 494 4140

Houston 14800 St. Mary’s Lane Suite 160, Houston TX 77079 Tel.: 1 281 493 8698 Fax: 1 281 493 8601

Lake Forest One Spectrum Pointe Suite 350 Lake Forest, CA 92630 Tel.: 1 949 206 8400 Fax: 1 949 206 8499

Lisle 2300 Cabot Drive Suite 250, Lisle, IL 60532 Tel.: 1 630 482 5000 Fax: 1 630 505 9144

www.infosys.com

Europe New York 630 Fifth Avenue Rockefeller Center Suite 1600 New York, NY 10111 Tel.: 1 646 254 3100 Fax: 1 646 254 3101

Phoenix 10835 N 25th Avenue Suite 200 Phoenix AZ 85029 Tel.: 1 480 655 3598 Fax: 1 480 655 3501

Plano

Belgium

Ireland

Park Atrium-Regus 11, Rue des Colonies / Kolonienstraat B 1000 Brussels Tel.: 32 2 517 62 30 Fax: 32 2 517 67 00

Ballsbridge Regus Centre Alexandra House - Sweepstakes Dublin 4 Tel.: 353 1631 9000 Fax: 353 1631 9001

Czech Republic Zitna Street 1578 / 52 120 00 Prague 2 Tel.: 420 222 874 100 Fax: 420 222 874 110

Denmark

6100, Tennyson Parkway Suite 200, Plano, TX 75024 Tel.: 1 469 229 9400 Fax: 1 469 229 9598

Regus Copenhagen Larsbjoernsstraede 3 1454 Copenhagen Tel.: 45 33 3225 25 Fax: 45 33 3243 70

Quincy

Finland

Two Adams Place Quincy, MA 02169 Tel.: 1 781 356 3100 Fax: 1 781 356 3150

Reston 12021 Sunset Hills Road Suite 340, Reston, VA 20190 Tel.: 1 703 481 3880 Fax: 1 703 481 3889

Southfield Suite 2850 3000 Town Center Southfield, MI 48075 Tel.: 1 248 208 3317 Fax: 1 248 208 3315

Canada Toronto 5140 Yonge Street Suite 1400 Toronto Ontario M2N 6L7 Tel.: 1 416 224 7400 Fax: 1 416 224 7449

Calgary Suite 2600, SunLife Plaza West 144-4th Avenue SW Calgary, AB T2P 3N4 Tel.: 1 403 269 1344 Fax:1 403 716 3637

United Kingdom

Italy Via Torino 2 20123 Milano Tel.: 39 02 7254 6456 Fax: 39 02 7254 6400

Norway Regus Business Centre Ibsen AS C. J. Hambrosplass 2C 1st Floor, Oslo 0164 Tel.: 47 22 99 60 42 Fax: 47 22 99 60 10

Spain

Regus Mannerheimintie 12 B 00100 Helsinki Tel.: 358 925 166 239 Fax: 358 925 166 100

Calle Ribera del Loira 46 (Regus) 28042, Madrid Tel.: 34 91 503 0644 Fax: 34 91 503 0530

France

Sweden

Paris 12 Avenue de I’Arche Faubourg de l’Arche 92419 Courbevoie Cedex Paris Tel.: 33 1 46 91 84 56 Fax: 33 1 46 91 88 45

Toulouse 7, Avenue Didier Daurat 1st Floor, Blagnac 31700 Toulouse Tel.: +33 5 34 50 92 77 Fax: +33 5 34 50 91 90

Germany Frankfurt Topas 1 Mergenthalerallee 77 65760 Eschborn / Frankfurt Tel.: 49 6196 9694 0 Fax: 49 6196 9694 200

Stuttgart Liebknechtstrasse 33 D 70565 Stuttgart Tel.: 49 711 7811 570 Fax: 49 711 7811 571

Stureplan 4C, 4tr 114 35, Stockholm Tel.: 46 8 463 1112 Fax: 46 8 463 1114

London 14th & 15th Floor 10 Upper Bank Street Canary Wharf London E 14 5NP Tel.: 44 20 7715 3300 Fax: 44 20 7715 3301

Milton Keynes MWB Business Exchange Centres Exchange House 494 Midsummer Boulevard Central Milton Keynes MK9 2EA Tel.: 44 190 825 5500 Fax: 44 190 825 5700

Swindon Part First Floor Wakefield House Aspect Park Pipers Way Swindon SN 31RE Tel.: 44 179 352 8766 Fax: 44 179 352 3714

Switzerland Geneva G Block, 1st Floor ICC Route de Pré-Bois 20 1215 Geneva Tel.: 41 22 710 7980 Fax: 41 22 710 7989

Zurich 3rd Floor, Badenerstrasse 530 8048 Zurich Tel.: 41 43 817 4170 Fax: 41 43 817 4150

The Netherlands World Trade Center H-Tower, 23rd Floor Zuidplein 190 1077 XV Amsterdam Tel.: 31 20 796 5500 Fax: 31 20 796 5501

Walldorf SAP Partner Port Office Altrottstr. 3, 69190 Walldorf Tel.: 49 6227 73 4350 Fax: 49 6227 73 4359

Infosys Annual Report 2007-08

| 151

Global presence India

www.infosys.com

Subsidiaries

Bangalore Electronics City, Hosur Road Bangalore 560 100 Tel.: 91 80 2852 0261 Fax: 91 80 2852 0362 Infosys – Center Point Offshore Development Center Plot No. 26A Electronics City, Hosur Road Bangalore 560 100 Tel.: 91 80 2852 0261 Fax: 91 80 2852 0362 Reddy Building K 310, 1st Main, 5th Block Koramangala Bangalore 560 095 Tel.: 91 80 2553 2591 Fax: 91 80 2553 0391

Bhubaneswar Plot No. E / 4, Info City Bhubaneswar 751 024 Tel.: 91 674 232 0032 Fax: 91 674 232 0100

Chandigarh Ground Floor, Block A & B DLF Building, Plot No. 2 Rajiv Gandhi Chandigarh Technology Park Kishangarh, Mani Majra Chandigarh 160 101 Tel.: 91 17 2502 1100 Fax: 91 17 2504 6222 Plot No. 1 Rajiv Gandhi Chandigarh Technology Park Kishangarh Chandigarh 160 101 Tel.: 91 17 2503 8000 Fax: 91 17 2506 0860 Plot No. 8-15 Rajiv Gandhi Technology Park Kishangarh (Near Mani Majra) Chandigarh 160 101 Tel.: 91 17 2503 8000 Fax: 91 17 2506 7251

Chennai 138 Old Mahabalipuram Road Sholinganallur Chennai 600 119 Tel.: 91 44 2450 9530 Fax: 91 44 2450 0390 Mahindra Industrial Park TP 1/1, Central Avenue Techno Park SEZ Mahindra World City Natham Sub Post, Chengelpet Kancheepuram District Chennai 603 002 Tel.: 91 44 4741 1111 Fax: 91 44 4741 5151

Hyderabad Survey No. 210 Manikonda Village Lingampally, Rangareddy (Dist.) Hyderabad 500 032 Tel.: 91 40 6642 0000 Fax: 91 40 2300 5223

Mangalore Kuloor Ferry Road, Kottara Mangalore 575 006 Tel.: 91 824 245 1485 / 88 Fax: 91 824 245 1504

IT & ITeS SEZ Kamblapadav Kurnad Post, Pajeet Village Bantwal Taluk 574 153 Dakshina Kannada District Tel.: 91 824 228 4492 Fax: 91 824 228 4491

Mumbai 85, ‘C’, Mittal Towers 8th Floor, Nariman Point Mumbai 400 021 Tel.: 91 22 2284 6490 Fax: 91 22 2284 6489

Mysore No. 350, Hebbal Electronics City Hootagalli, Mysore 570 018 Tel.: 91 821 240 4101 Fax: 91 821 240 4200

Infosys BPO Limited Australia Melbourne Level 2 & 3 484 St. Kilda Road Melbourne VIC 3004 Tel.: 61 3 9860 2000 Fax: 61 3 9860 2999

Canada Toronto 5140, Yonge Street Suite 1400 Toronto ON M2N 6L7 Tel.: 416 224 7400 Fax: 416 224 7449

Pune

Sydney

Plot No. 1, Building No. 4 Pune Infotech Park Hinjawadi, Taluka Mulshi Pune 411 057 Tel.: 91 20 2293 2900 Fax: 91 20 2293 4540

Level 4, 77 Pacific Highway North Sydney NSW 2060 Tel.: 61 2 8912 1500 Fax: 61 2 8912 1555

Plot No. 24 Rajiv Gandhi Infotech Park Phase II, Village Maan Taluka Mulshi, Pune 411 057 Tel.: 91 20 2293 2800 Fax: 91 20 2293 4540

The Netherlands

New Delhi

Brno

Regus WTC Zuidplein Zuidplein 36 1077 XV Amsterdam Tel.: +31 20 799 7800 Fax: +31 20 799 7801

K30, Green Park Main Behind Green Park Market New Delhi 110 016 Tel.: 91 11 2651 4829 Fax: 91 11 2685 3366

Holandka 9,63900,Brno Tel.: 420 542 212406 Fax: 420 543 236349

Infosys BPO Philippines

Pune

Bangalore

Plot No. 1 Rajiv Gandhi Infotech Park Hinjawadi, Taluka Mulshi Pune 411 057 Tel.: 91 20 2293 2800 Fax: 91 20 2293 2832 Plot No. 24 Rajiv Gandhi Infotech Park Phase II, Village Maan Taluka Mulshi, Pune 411 057 Tel.: 91 20 3982 7000 Fax: 91 20 3982 8000

Thiruvananthapuram 3rd Floor, Bhavani Technopark Thiruvananthapuram 695 581 Tel.: 91 471 270 0888 Fax: 91 471 270 0889

Asia Pacific Hong Kong

16F Cheung Kong Centre 2 Queen’s Road Central Central, Hong Kong Tel.: 852 2297 2231 Fax: 852 2297 0066

Japan

Izumi Garden Wing 2F 1-6-3, Roppongi, Minato-ku Tokyo 106 0032 Tel.: 81 3 5545 3251 Fax: 81 3 5545 3252

Mauritius

4th Floor, B Wing Ebène Cyber Towers Reduit, Mauritius Tel.: 230 401 9200 Fax: 230 464 1318

United Arab Emirates Z3 Office 11, SAIF Zone P. O. Box 8230, Sharjah Tel.: 971 6557 1068 Fax: 971 6557 3768

Czech Republic

India Electronics City, Hosur Road Bangalore 560 100 Tel.: 91 80 2852 2405 Fax: 91 80 2852 2411 Salarpuria Infozone Wing A, No. 39(P), 41(P) & 42(P) Electronic City Phase II Industrial Area Bangalore 560100 Tel.: 91 80 4067 0035 Fax: 91 80 4067 0034 27, SJR Towers Bannerghatta Road J. P. Nagar, III Phase Bangalore 560 078 Tel.: 91 80 5103 2000 Fax: 91 80 2658 8676 No. 151/1, (600 / 677) Opp. IIMB, Doorasanipalya Bannerghatta Road Bangalore 560 076 Tel.: 91 80 4103 2923 Fax: 91 80 2658 8676 GNR Chambers 882 & 883, 8th Main J. P. Nagar, III Phase Bangalore 560 078 Tel.: 91 80 4100 3202 Fax: 91 80 2658 8676 Temple Steps 6th & 7th Floor No. 184, Annasalai Saidapet Chennai 600 015 Tel.: 91 44 6600 7000 Fax: 91 44 6600 7005

Gurgaon

3rd Floor, Trade Hall Metro Market, Bonifacio Global City Fort Bonifacio Taguig City Metro Manila, Philippines Tel.: 632 856 3319 Fax: 632 856 3320

Infosys BPO Poland Sp. Z o.o. Al. Piłsudskiego 22 90-051 Lodz, Poland Tel.: 48 42 291 8000 Fax: 48 42 291 8081

Infosys BPO (Thailand) Ltd. No.1768, 26th Floor, Thai Summit Tower New petchaburi Road, Bangkapi Huaykwang, Bangkok 10310 Tel.: 662 614 3444 Fax: 662 614 3333

United Kingdom 14th Floor 10 Upper Bank Street Canary Wharf London E14 5NP Tel.: 44 20 7715 3388 Fax: 44 20 7715 3301

United States Bridgewater 400 Crossing Boulevard 1st Floor, Bridgewater NJ 08807 Tel.: 1 908 450 8209 Fax: 1 908 842 0284

Infosys Technologies (Australia) Pty. Limited

Bldg. No. 24 & 25 Shanghai Pudong Software Park 498 Guoshoujing Road Pudong New Area Shanghai 201203 Tel.: 86 21 5027 1588 Fax: 86 21 5080 2927 Bldg. 18, Capital of Leaders 1387 Zhang Dong Road Zhang Jiang Hi-Technology Park Pudong New Area Shanghai 201203 Tel.: 86 21 6105 5500 Fax: 86 21 6105 5501

Hangzhou 18F Huarong Times Mansion 3880 Jiangnan Avenue Binjiang District Tel.: 86571 28992690 Fax: 86571 28992690

Beijing 14th Floor, IBM Tower Pacific Century Place 2A Workers Stadium Road North Chaoyang District Beijing 100027 Tel.: 86 10 6539 1095 Fax: 86 10 6539 1060

Infosys Consulting Inc. North America 6100, Tennyson Parkway Suite 200, Plano, TX 75024 Tel.: 1 972 770 0450 Fax: 1 972 770 0490

United Kingdom 14th & 15th Floor 10 Upper Bank Street Canary Wharf London E 14 5NP Tel.: 44 20 7715 3300 Fax: 44 20 7715 3301

Infosys Technologies S. de R. L. de C. V. Ave. Acueducto #2610 4piso Col. Del Paseo Residencial Monterrey, N.L. C. P. 64920 Tel.: 52 1 8112358400 Fax: 52 81 1253 8401

Melbourne

The Presidency, 351/2 Mehrauli Gurgaon Road Gurgaon 122 001 Tel.: 91124 4267 747 Fax: 91124 3922 103

Level 2 & 3 484 St. Kilda Road Melbourne VIC 3004 Tel.: 61 3 9860 2000 Fax: 61 3 9860 2999

Jaipur

Level 18 & 25 150 Lonsdale Street Melbourne VIC 3000 Tel.: 61 3 8664 6100 Fax: 61 3 8650 6199

Plot No. E-142-143 Sitapura Industrial Area Jaipur 302022 Tel.: 91141 2771 325 Fax: 91141 2771 325

Infosys Tech n ologies (China) Co. Ltd.

Bankers Deutsche Bank Bank of America ICICI Bank Call us at Within the U.S.: 1 800 ITL INFO Outside the U.S.: 91 80 2852 0261

Creative concept and design by Communication Design Group, Infosys. © 2008 Infosys Technologies Limited, Bangalore, India. Infosys acknowledges the proprietary rights in the trademarks and product names of other companies mentioned in the Annual Report.

152 |

Power of talent